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Public Expenditure and Economic Growth in Nigeria: Evidence from Auto-Regressive Distributed Lag Specification

Author

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  • Tajudeen Egbetunde Ismail O. Fasanya

    (Department of Economics and Financial Studies,College of Management and Social Sciences,Fountain University, Osogbo, Nigeria Department of Economics, University of Ibadan, Ibadan, Nigeria)

Abstract

This paper analyses the impact of public expenditure on economic growth in Nigeria during the period 1970 to 2010 making use of annual time series data. The study employs the bounds testing (ARDL) approach to examine the long run and short run relationships between public expenditure and economic growth in Nigeria. The bounds test suggested that the variables of interest put in the framework are bound together in the long-run. The associated equilibrium correction was also signifi cant confi rming the existence of long-run relationships. Our fi ndings indicate the impact of total public spending on growth to be negative which is consistent with other past studies. Recurrent expenditure however was found to have little signifi cant positive impact on growth. Therefore, government should increase its spending on infrastructure, social and economic activities. JEL Classification: C51, H50

Suggested Citation

  • Tajudeen Egbetunde Ismail O. Fasanya, 2013. "Public Expenditure and Economic Growth in Nigeria: Evidence from Auto-Regressive Distributed Lag Specification," Zagreb International Review of Economics and Business, Faculty of Economics and Business, University of Zagreb, vol. 16(1), pages 79-92, May.
    • Handle: RePEc:zag:zirebs:v:16:y:2013:i:1:p:79-92
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    Citations

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    Cited by:

    1. Rasaki Olufemi Kareem & Rukayat Adebunmi Arije & Zakariah Olayiwola Amoo & Hassan Yusuf Avovome, 2022. "Federal Government Agricultural Financing And Economic Growth In Nigeria," Economic Review: Journal of Economics and Business, University of Tuzla, Faculty of Economics, vol. 20(1), pages 31-40, May.
    2. Nyasha Sheilla & Odhiambo Nicholas M., 2019. "The Impact of Public Expenditure on Economic Growth: A Review of International Literature," Folia Oeconomica Stetinensia, Sciendo, vol. 19(2), pages 81-101, December.
    3. Sumbal Javed & Muhammad Tariq & Saima Urooge, 2017. "The Role of Public Spending and Credit Disbursement in the Agriculture Sector of Pakistan," Global Economics Review, Humanity Only, vol. 2(1), pages 34-41, December.
    4. Stephen Taiwo Onifade & Savaş Çevik & Savaş Erdoğan & Simplice Asongu & Festus Victor Bekun, 2020. "An empirical retrospect of the impacts of government expenditures on economic growth: new evidence from the Nigerian economy," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 9(1), pages 1-13, December.
    5. Ayoka Cynthia Odinakachi & Nzotta Samuel Mbadike & Kanu Success Ikechi, 2021. "The Effect of Federal Government Revenue and Expenditure On Economic Growth in Nigeria – An Empirical Review," International Journal of Innovation and Economic Development, Inovatus Services Ltd., vol. 7(3), pages 34-52, August.
    6. Erum, Naila & Sohag, Kazi & Said, Jamaliah & Musa, Kazi & Asghar, Muhammad Mansoor, 2024. "Governance, fiscal expenditure, and economic growth in OIC countries: Role of natural resources and information communication technology," Resources Policy, Elsevier, vol. 90(C).
    7. S Tharshan & W L M A Liyanage & P G K Nilanka & E A Selvanathan & M Jayasinghe and S Selvanathan, 2019. "The Impact of Sectoral Government Expenditure on Economic Growth: Evidence from Sri Lanka," Discussion Papers in Economics economics:201902, Griffith University, Department of Accounting, Finance and Economics.
    8. Rashmi Gupta, 2020. "Public Expenditure and Economic Growth in India: An Empirical Analysis Using Vector Autoregression (VAR) Model," GATR Journals jber189, Global Academy of Training and Research (GATR) Enterprise.
    9. Driton Balaj & Lirim Lani, 2017. "The Impact of Public Expenditure on Economic Growth of Kosovo," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 13(5), pages 401-412, OCTOBER.
    10. Ndanshau, Michael O.A. & Mdadila, Kenneth, 2023. "Government Expenditure and Economic Growth Nexus in Tanzania," African Journal of Economic Review, African Journal of Economic Review, vol. 11(3), June.
    11. Gilbert Deinde Ifarajimi & Kehinde Oluwole Ola, 2017. "Government Expenditure and Economic Growth in Nigeria: An Analysis with Dynamic Ordinary Least Squares," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 7(5), pages 8-26, May.
    12. Jemeel Adedotun, SANNI,, 2018. "Public Expenditure And Economic Growth In Nigeria," Ilorin Journal of Business and Social Sciences, Faculty of Social Sciences, University of Ilorin, vol. 20(1), pages 148-158, March.

    More about this item

    Keywords

    Public Spending; Economic Growth; ARDL Cointegration; Nigeria;
    All these keywords.

    JEL classification:

    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General

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