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The Influence of Economic Institutions in the Debt-Growth Nexus: Evidence from Nigeria

Author

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  • Martins Iyoboyi

    (Federal University Dutsin-Ma)

  • Abdullahi Badiru

    (Federal University Dutsin-Ma)

Abstract

This paper investigates the influence of economic institutions in the debt-growth nexus. Using data from 1970 to 2020 on Nigeria, the paper extends the econometric literature by deploying cointegration techniques that account for structural breaks. A long equilibrium relationship was found among debt, growth, economic institutions and associated variables. The effect of debt on growth was found to be positive up to a threshold of 13.62% and 27.19% of gross domestic product in the short and long-run respectively, beyond which its effect becomes negative and significant. Growth is more sensitive to economic institutions than debt, underscoring the criticality of institutions.

Suggested Citation

  • Martins Iyoboyi & Abdullahi Badiru, 2025. "The Influence of Economic Institutions in the Debt-Growth Nexus: Evidence from Nigeria," Open Economies Review, Springer, vol. 36(1), pages 177-195, February.
    • Handle: RePEc:kap:openec:v:36:y:2025:i:1:d:10.1007_s11079-024-09749-6
    DOI: 10.1007/s11079-024-09749-6
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    More about this item

    Keywords

    Africa; ARDL; Debt; Economic growth; Economic institutions; Structural break;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt

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