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Government Expenditure and Economic Growth Nexus: Evidence from Nigeria

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  • Oyediran, Leye Sherifdeen
  • Sanni, Ibrahim
  • Adedoyin, Lukman
  • Oyewole Olabode Michael

Abstract

The need to better the lots of citizens through government expenditure has raised questions on the impact of government expenditure on the economic development and growth of nations. It is against this background that this paper examined the antecedent effect of government spending on the Nigerian economic growth. The general objective of the study is to ascertain the relationship between government expenditure and economic growth in Nigeria; specifically, the study examined- (i) the significance influence of government capital expenditure on economic growth in Nigeria and (ii) the significance influence of government recurrent expenditure on economic growth in Nigeria. The study employed ordinary least square (OLS) multiple regression analysis in estimating the specified model, with the Gross Domestic Product (GDP) as the dependent variable, while Capital Expenditure (CAPEXP) and Recurrent Expenditure (REXP) are the independent variables. Data between 1980 ¨C 2013 were collected from secondary sources through the National Bureau of Statistics (NBS) and Central Bank of Nigeria (CBN). Results showed that in Nigeria, there exist a significant relationship between the government expenditure and economic growth. The study therefore recommends instilling fiscal discipline in government expenditures, and putting in place structural mechanisms to act as surveillance on capital spending so as to boost the nation¡¯s human and social capital.

Suggested Citation

  • Oyediran, Leye Sherifdeen & Sanni, Ibrahim & Adedoyin, Lukman & Oyewole Olabode Michael, 2016. "Government Expenditure and Economic Growth Nexus: Evidence from Nigeria," Business and Management Research, Business and Management Research, Sciedu Press, vol. 5(4), pages 56-61, December.
    • Handle: RePEc:jfr:bmr111:v:5:y:2016:i:4:p:56-61
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    References listed on IDEAS

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    1. Adolph Wagner, 1958. "Three Extracts on Public Finance," International Economic Association Series, in: Richard A. Musgrave & Alan T. Peacock (ed.), Classics in the Theory of Public Finance, pages 1-15, Palgrave Macmillan.
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    More about this item

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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