IDEAS home Printed from https://ideas.repec.org/a/bcp/journl/v7y2023i11p1082-1095.html
   My bibliography  Save this article

Effect of Selected Macroeconomic Variables on Oil Refining Industry Output in Nigeria

Author

Listed:
  • Abimbola Makanjuola – Agbola

    (Bingham University Karu, Nasarawa State.)

  • Assoc. Prof. Abayomi Awujola

    (Bingham University Karu, Nasarawa State)

  • Dr. Obumneke Ezie

    (Bingham University Karu, Nasarawa State)

Abstract

Nigeria runs a single-product economy where the major source of revenue for the country is crude oil exploration and exportation. The economy has over the years relied heavily on crude oil export for government revenues and its foreign exchange earnings. This dependence on the oil sector has had both salutary and deleterious impacts. Oil production crashed by vandalism and militant attacks in the Niger Delta, resulting in underperformance of the oil sector leading to poverty and a lack of infrastructural development across multiple sectors of the economy. This is why this paper seeks to investigate the impact of four key selected macroeconomic variables on Nigeria’s oil refining industry output. Autoregressive distributed lag model (ARDL) was adopted for data analysis. ADF Unit root tests revealed mixed order of integration while Co-integration Bounds test revealed the existence of long-run relationship between the dependent and independent variables. Findings revealed that there is a long-run relationship among the variables and all the variables have a positive relationship with oil refining industry output. The probability values indicate that Interest rate (INTR), Exchange rate (EXCR) and Net export (NEXP) do not have significant impact on oil refining industry output while Government capital expenditure (GCEXP) has significant impact on oil refining industry output. The paper recommends that favourable interest rate should be maintained, government should stabilize exchange rate and prioritize strategic investments in infrastructure development.

Suggested Citation

  • Abimbola Makanjuola – Agbola & Assoc. Prof. Abayomi Awujola & Dr. Obumneke Ezie, 2023. "Effect of Selected Macroeconomic Variables on Oil Refining Industry Output in Nigeria," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 7(11), pages 1082-1095, November.
  • Handle: RePEc:bcp:journl:v:7:y:2023:i:11:p:1082-1095
    as

    Download full text from publisher

    File URL: https://www.rsisinternational.org/journals/ijriss/Digital-Library/volume-7-issue-11/1082-1095.pdf
    Download Restriction: no

    File URL: https://www.rsisinternational.org/journals/ijriss/articles/effect-of-selected-macroeconomic-variables-on-oil-refining-industry-output-in-nigeria/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Halvor Mehlum & Karl Moene & Ragnar Torvik, 2006. "Cursed by Resources or Institutions?," The World Economy, Wiley Blackwell, vol. 29(8), pages 1117-1131, August.
    2. M. Hashem Pesaran & Yongcheol Shin & Richard J. Smith, 2001. "Bounds testing approaches to the analysis of level relationships," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(3), pages 289-326.
    3. Olorunfemi Sola & Tomola M. Obamuyi & Felix O. Adekunjo & E.O Ogunleye, 2013. "Manufacturing Performance in Nigeria: Implication for Sustainable Development," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 3(9), pages 1195-1213, September.
    4. Olorunfemi Sola & Tomola M Obamuyi & Felix O Adekunjo & E.O Ogunleye, 2013. "Manufacturing Performance in Nigeria: Implication for Sustainable Development," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 3(9), pages 1195-1213.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Caner Demir & Suleyman Emre Ozcan, 2023. "The Asymmetric Relationship Among Industrial Production, Capacity Utilization Rate, and Producer Prices in Türkiye: The Nonlinear ARDL Model Approach," Journal of Economic Policy Researches, Istanbul University, Faculty of Economics, vol. 10(2), pages 525-543, July.
    2. Guan, Jialin & Kirikkaleli, Dervis & Bibi, Ayesha & Zhang, Weike, 2020. "Natural resources rents nexus with financial development in the presence of globalization: Is the “resource curse” exist or myth?," Resources Policy, Elsevier, vol. 66(C).
    3. Ben-Salha, Ousama & Dachraoui, Hajer & Sebri, Maamar, 2021. "Natural resource rents and economic growth in the top resource-abundant countries: A PMG estimation," Resources Policy, Elsevier, vol. 74(C).
    4. Khan, Zeeshan & Hussain, Muzzammil & Shahbaz, Muhammad & Yang, Siqun & Jiao, Zhilun, 2020. "Natural resource abundance, technological innovation, and human capital nexus with financial development: A case study of China," Resources Policy, Elsevier, vol. 65(C).
    5. Ruba Abdullah Aljarallah, 2020. "The Economic Impacts of Natural Resource Dependency in Gulf Countries," International Journal of Energy Economics and Policy, Econjournals, vol. 10(6), pages 36-52.
    6. Muhammad Sohail Amjad Makhdum & Muhammad Usman & Rakhshanda Kousar & Javier Cifuentes-Faura & Magdalena Radulescu & Daniel Balsalobre-Lorente, 2022. "How Do Institutional Quality, Natural Resources, Renewable Energy, and Financial Development Reduce Ecological Footprint without Hindering Economic Growth Trajectory? Evidence from China," Sustainability, MDPI, vol. 14(21), pages 1-25, October.
    7. Yilanci, Veli & Aslan, Murat & Ozgur, Onder, 2021. "Disaggregated analysis of the curse of natural resources in most natural resource-abundant countries," Resources Policy, Elsevier, vol. 71(C).
    8. Syed, Qasim Raza & Durani, Farah & Kisswani, Khalid M. & Alola, Andrew Adewale & Siddiqui, Aaliyah & Anwar, Ahsan, 2024. "Testing natural resource curse hypothesis amidst geopolitical risk: Global evidence using novel Fourier augmented ARDL approach," Resources Policy, Elsevier, vol. 88(C).
    9. Wang, Qi & Zhang, Li, 2024. "Are natural resource volatility curses or blessings for economic performance? Stories of resource-rich regions," Finance Research Letters, Elsevier, vol. 69(PB).
    10. Yang, Jinxuan & Rizvi, Syed Kumail Abbas & Tan, Zhixiong & Umar, Muhammad & Koondhar, Mansoor Ahmed, 2021. "The competing role of natural gas and oil as fossil fuel and the non-linear dynamics of resource curse in Russia," Resources Policy, Elsevier, vol. 72(C).
    11. Itaman, Richard E. & Awopegba, Oluwafemi E., 2021. "Finance, oil rent and premature deindustrialisation in Nigeria," Structural Change and Economic Dynamics, Elsevier, vol. 59(C), pages 149-161.
    12. Wang, Zhe & Teng, Yin-Pei & Wu, Shuzhao & Liu, Yuxiang & Liu, Xianchang, 2023. "Geopolitical risk, financial system and natural resources extraction: Evidence from China," Resources Policy, Elsevier, vol. 82(C).
    13. Janus, Thorsten, 2024. "Does export underreporting contribute to the resource curse?," World Development, Elsevier, vol. 181(C).
    14. Niu, Shuhua & Liu, Wenhe & Su, Ying-Yueh & Al-Abyadh, Mohammed Hasan Ali & Muda, Iskandar & Abdul-Samad, Zulkiflee, 2024. "Driving sustainable development: Role of institutional quality and future of China's mineral resource management projects," Resources Policy, Elsevier, vol. 95(C).
    15. Sheng, Jichuan & Qiu, Wenge, 2022. "Water-use technical efficiency and income: Evidence from China's South-North Water Transfer Project," Technological Forecasting and Social Change, Elsevier, vol. 184(C).
    16. A. Sankaran & A. Vadivel & M. Abdul Jamal, 2020. "Effects of dynamic variables on industrial output in one of the world’s fastest-growing countries: case evidence from India," Future Business Journal, Springer, vol. 6(1), pages 1-8, December.
    17. Ali, Adnan & Ramakrishnan, Suresh & Faisal,, 2022. "Financial development and natural resources. Is there a stock market resource curse?," Resources Policy, Elsevier, vol. 75(C).
    18. Anthony Ilegbinosa Imoisi, 2018. "Is Trade Openness Suitable for Growth of the Nigerian Manufacturing Sector? An Autoregressive Distributed Lag Approach," Academic Journal of Economic Studies, Faculty of Finance, Banking and Accountancy Bucharest,"Dimitrie Cantemir" Christian University Bucharest, vol. 4(2), pages 71-82, June.
    19. Ali, Adnan & Ramakrishnan, Suresh & Faisal, Faisal & Bazhair, Ayman Hassan & Sulimany, Hamid Ghazi H & Rahman, Sami Ur, 2024. "Does escaping the natural resource curse complement evading the financial resource curse too? Empirical evidence from Indonesia," International Review of Economics & Finance, Elsevier, vol. 91(C), pages 539-555.
    20. Mamoudou Camara, 2023. "Bauxite mining and economic growth in Guinea over the period 1986–2020: empirical evidence from ARDL and NARDL approaches," Mineral Economics, Springer;Raw Materials Group (RMG);Luleå University of Technology, vol. 36(1), pages 157-179, January.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bcp:journl:v:7:y:2023:i:11:p:1082-1095. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Dr. Pawan Verma (email available below). General contact details of provider: https://rsisinternational.org/journals/ijriss/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.