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The Determinants Of Domestic Investment In Nigeria: A New Evidence From Non-Linear Autoregressive Distributed Lag (Nardl) Model

Author

Listed:
  • Joseph David

    (Department of Economics, IBB University Lapai, Nigeria)

  • Musa Abdullahi Sakanko

    (Department of Economics, University of Jos, Nigeria)

  • James Obilikwu

    (Department of Economics, IBB University, Lapai, Nigeria)

Abstract

This study employs an extended Nonlinear ARDL cointegration approach to examine the determinants of domestic investment in Nigeria over the 1980-2018 period. The result from bound testing reveal the presence of cointegrating relationship between domestic investment and the included variables. The empirical evidence demonstrates that domestic investment in Nigeria is determined by inflation, real interest and exchange rate, government spending, electric power consumption, savings, per capita income, credit to private sector and the interaction between government spending and oil price in the short-run; and inflation, interest and exchange rate, government spending, internal conflict, savings, and interaction between oil price and government spending in the long-run. The results also suggest that the impact of increase in interest, inflation and exchange rate is statistically different from their decrease. In essence, this study recommends the increase in government capital expenditure, savings, diversification of the economy, reduction of lending interest rate, maintenance of investment-friendly inflation rate, and conflicts control.

Suggested Citation

  • Joseph David & Musa Abdullahi Sakanko & James Obilikwu, 2020. "The Determinants Of Domestic Investment In Nigeria: A New Evidence From Non-Linear Autoregressive Distributed Lag (Nardl) Model," Economics and Management, Faculty of Economics, SOUTH-WEST UNIVERSITY "NEOFIT RILSKI", BLAGOEVGRAD, vol. 17(2), pages 1-25.
    • Handle: RePEc:neo:journl:v:17:y:2020:i:2:p:1-25
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    Citations

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    Cited by:

    1. Nurudeen Abu & Joseph David & Musa Abdullahi Sakanko & Ben-Obi Onyewuchi Amaechi, 2022. "Oil Price and Public Expenditure Relationship in Nigeria: Does the Level of Corruption Matter?," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 3, pages 59-80.
    2. Oyedepo, Elizabeth Omolola & Okor, Onome Jacinta, 2024. "Determinants of Domestic Investment: Evidence from Nigeria," African Journal of Economic Review, African Journal of Economic Review, vol. 12(1), March.
    3. Awadh Ahmed Mohammed Gamal & Joseph David & Mohd Asri Mohd Noor & Mohd Yahya Mohd Hussin & K. Kuperan Viswanathan, 2024. "Asymmetric Effect of Shadow Economy on Environmental Pollution in Egypt: Evidence from Bootstrap NARDL Technique," International Journal of Energy Economics and Policy, Econjournals, vol. 14(3), pages 206-215, May.

    More about this item

    Keywords

    Investment; Interest rate; inflation; exchange rate; government; internal conflict; Nigeria; NARDL;
    All these keywords.

    JEL classification:

    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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