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Abstract
This study investigates the nexus between financial development, agricultural output, and institutional quality in Nigeria using annual time series data from 1990 to 2022. The Autoregressive Distributed Lag (ARDL) model and Toda-Yamamoto's (1995) non-causality approach are employed to assess the moderating influence of institutional quality on the relationship between financial development and agricultural output. The long-run findings reveal that financial development, institutional quality, and lending interest rates exert a positive and significant impact on agricultural output, while human development has a negative and significant impact. Conversely, the short-run results indicate that financial development and human development positively and significantly influence agricultural output, whereas lending interest rates negatively and significantly impact agricultural output. Based on these findings, the study recommends that policymakers enact measures to promote financial development, enhance institutional quality, and reduce interest rates to stimulate agricultural growth. Additionally, strengthening institutional quality is crucial to ensure that the benefits of financial development reach smallholder farmers, who play a pivotal role in Nigeria's agricultural sector. This study contributes to the literature by examining the moderating role of institutional quality in the relationship between financial development and agricultural output in Nigeria.