Government Expenditure and Industrial Development in Nigeria: Long Run and Short Run Dynamics from ARDL Approach

Main Article Content

Sarah Elechi Jeff-Anyeneh
Gideon Kasie Ezu
Amalachukwu Chijindu Ananwude

Abstract

This study estimated the long run and short dynamics between government expenditure and industrial development in Nigeria from 1981 to 2016 with the view to evaluating how the industrial sector has been influenced by variation in government expenditure. The Autoregressive Distribute Lag (ARDL) was the technique applied. We found with dismay that government expenditure has not positively affected industrial development in Nigeria both in long run and short run despite the continuous rise in government expenditure and various policies of the government towards improving industrial performance in Nigeria. Funds allocated for environmental factors of production such as electricity, road, water, communication, etc. should be appropriately utilized. Political officer holders, contractors executing capital projects, people in corridors of powers, etc. who are embroil in misappropriation or embezzlement of public fund should be properly tried and punished if found guilty.

Keywords:
Government expenditure, industrial development

Article Details

How to Cite
Jeff-Anyeneh, S. E., Ezu, G. K., & Ananwude, A. C. (2019). Government Expenditure and Industrial Development in Nigeria: Long Run and Short Run Dynamics from ARDL Approach. Journal of Scientific Research and Reports, 23(6), 1-9. https://doi.org/10.9734/jsrr/2019/v23i630136
Section
Original Research Article

Article Metrics


References

Echekoba FN, Ananwude AC. The relationship between index of industrial production and stock market liquidity: A co-integration evidence from stock exchange of Nigeria’s value of stock traded ratio. Frontiers of Accounting and Finance. 2016;1(1):29–39.

Twumasi RA. The impact of fiscal policy on economic growth in Ghana. Master’s thesis, Kwame Nkrumah University of Science and Technology, Ghana; 2012.

Mulutgeta D. The impact of government expenditure on economic growth in Ethiopia: An empirical analysis using Johansen co-integration approach. Master’s thesis, Jimma University, Ethiopia; 2012.

Fouladi M. The impact of government expenditure on GDP, employment and private investment a CGE model approach. Iranian Economic Review. 2010;15(27):53-76.

Ayeyemi LO. Industrial development in developing nations: A case study of Nigerian small and medium business enterprises. Bachelor’s thesis, Savonia University of Applied Sciences, Savonia; 2013.

Adebayo FA, Adebusuyi AT, Ishola MA. An econometric analysis of impact of public expenditure on industrial growth in Nigeria. International Journal of Economics and Finance. 2014;6(10):112-117.

Falade OE, Olagbaju IO. Effect of government capital expenditure on manufacturing sector output in Nigeria. Business and Economic Research. 2015;5(2):136-156.

Iweriebor S, Egharevba MI, Adegboye AC. Government spending and industrial development in Nigeria: A dynamic investigation. Annals of the University of Petroşani, Economics. 2015;15(1):179-190.

Tawose J. Effects of public expenditure on industrial sector productivity in Nigeria. Canadian Social Science. 2012;8(1):204-214.

Barro RJ. Government spending in a simple model of endogenous growth. Journal of Political Economy. 1990;98:103-125.

Enu P, Hagan E, Attah-Obeng P. Impact of macroeconomic factors on industrial production in Ghana. European Scientific Journal. 2013;9(28):238-256.

Nwanne TFI. Implications of government capital expenditure on the manufacturing sector in Nigeria. European Journal of Accounting, Auditing and Finance Research. 2015;3(10):19-33.

Anwar S, Zheng M. Government spending on research and development and industrial production in Singapore. International Journal of Asian Management. 2004;3:53–65.

Nekarda CJ, Ramey VA. Industry evidence on the effects of government spending. Finance and Economics Discussion Series Divisions of Research & Statistics and Monetary Affairs, Federal Reserve Board, Washington, D.C; 2010.

Njoku AC, Okezie AI, Idika N. Is government capital expenditure productive? Evidence from Nigerian manufacturing sector (1971-2012). Journal of Educational and Social Research. 2014;4(5):143-154.

Isaksson A. Public capital, infrastructure and industrial development. Research and Statistics Branch Programme Coordination and Field Operations Division, Research and Statistics Branch, Working Paper No: 15/2009; 2010.