This study investigates the impact of government expenditure, savings, FDI on economic growth in Nigeria for 1995 to 2018. The data for the study was sourced from World Bank’s World Development Indicator, while OLS estimating technique was employed for the analysis. Using OLS estimator, the empirical evidence from the findings show that government expenditure, savings, FDI significantly impacted economic growth. Therefore, government expenditure, savings, foreign direct investments are key determinants of economic growth in Nigeria. Based on the findings, we suggest that the Nigerian government should reduce the personal income tax so as to promote the disposal income and invariables savings. Also, effort should be made to promote stable and less volatile macroeconomic environment for the attraction of foreign direct investment inflow into Nigeria. This in turn could boost employment and increase in income and the individual savings. Further, we found government expenditure to negatively relate to economic growth. Hence, government spending in itself is not bad but should be utililize efficiently to help drive economic growth. Hence, we suggest that government spending should be reduced since it does not contribute immensely to the growth of the economy.
| Published in | Journal of Investment and Management (Volume 9, Issue 4) |
| DOI | 10.11648/j.jim.20200904.11 |
| Page(s) | 92-99 |
| Creative Commons |
This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited. |
| Copyright |
Copyright © The Author(s), 2020. Published by Science Publishing Group |
Government Expenditure, Savings, FDI and Economic Growth
| [1] | Acaravci A. and Ozturk, I. (2012), “Foreign direct investment, export and economic growth”; Empirical evidence from new EU Countries, Romanian Journal of Economic Forecasting, Vol. 2. |
| [2] | Adeleke, K, et al (2014), “Impact of Foreign Direct Investment on Nigeria Economic Growth” International Journal of Academic Research in Business and Social Sciences, Vol. 4, No. 8. |
| [3] | Adeniyi, O. et al (2015), “Financial development and economic growth in Nigeria:” Evidence from threshold modeling. Economic Analysis and Policy, Vol. 47. |
| [4] | Adeolu, B. (2007), “FDI and Economic Growth: Evidence from Nigeria: The African Economic Research Consortium, City Square, Nairob, Kenya. |
| [5] | Adil, M. et al (2017), “Wagner’s Hypothesis”; An Empirical Verification, IIM Kozhikode, Society & Management Review, Vol. 6, No. 1. |
| [6] | Almfraji, A. and, Mohamoud, K. (2014), “Foreign direct investment and economic growth”; Procedia-Social and Behavioral Sciences, Vol. 109. |
| [7] | Alzaidy, G. et al (2017), “The Impact of Foreign-direct Investment on Economic Growth in Malaysia” The Role of Financial Development, International Journal of Economics and Financial Issues, Vol. 7, No. 3. |
| [8] | Anochiwa, L. et al (2018), “Foreign Direct Investment and Economic Growth” Literature from 1980 to 2018, International Journal of Economics and Financial, Vol. 8, No. 5. |
| [9] | Awode, S. S and Akpa, E. O, (2018), “Testing Wagner’s Law in Nigeria in the Short and Long Run”; Acta Universitatis Danubius Oeconomica, Vol. 14, No. 7. |
| [10] | Ayinde et al., (2015), “Modeling Nigerian Government Expenditure, Revenue and Economic Growth” Co-integration, Error Correction Mechanism and Combined Estimators Analysis Approach. Asian Economic and Financial Review, Vol. 5, No. 6. |
| [11] | Bayer, Y. and Ozturk, O. (2016), “Interaction between financial development and FDI inflows in Turkey: Paper Presented at Scientific Cooperation for the Future in the Social Sciences Usak Turkey. |
| [12] | Begum, M. et al (2018), “Foreign direct investment-growth nexus revisited” New evidence from Bangladesh, International Journal of Economics and Financial Issues, Vol. 8, No. 3. |
| [13] | Bolarinwa, S. T. and Obembe, O. B. (2017), “Empirical Analysis of the Nexus between Saving and Economic Growth in Selected African Countries” Journal of Development Policy and Practice, Vol. 2, No. 1. |
| [14] | Bouchoucha, N. and Ali, W. (2019), “The impact of FDI on economic growth”; An estimate by the ARDL approach, Munich Personal RePEc Archive. |
| [15] | Caesar, A. E. et al (2018), “Foreign direct investment, growth of output indicators and economic growth in China” Empirical evidence on causal links, International Journal of Economics and Financial Issues, Vol. 8, No. 3. |
| [16] | Chowdhury, M. (2016), “Financial development, remittances and economic growth” Evidence using a dynamic panel estimation, Journal of Applied Economic Research, Vol. 10. |
| [17] | Chude, N P. and Chude D I (2013), “Impact Of Government Expenditure On Economic Growth In Nigeria” International Journal of Business and Management Review, Vol. 1, No. 4, pp. 64-71, December 2013. |
| [18] | Connolly, M. and Li, C. (2016), “Government spending and economic growth in the OECD countries” Journal of Economic Policy Reform, Vol. 19, No. 4. |
| [19] | Danladi, J. D. et al (2015), “Government expenditure and its implications for economic growth: Evidence from Nigeria” Journal of Economics and Sustainable Development. |
| [20] | De Mello, L. R. (1999),” Foreign direct investment –led growth” Evidence from times series and panel data. Oxford Economic Papers, Vol. 51. |
| [21] | Faisal, F. et al (2016), “Impact of economic growth, foreign direct investment and financial development on stock prices in China” Empirical evidence from time series analysis, International Journal of Economics and Financial Issues, Vol. 6, No. 4. |
| [22] | Getenet, G. (2017), “Trends and Determinants of Gross Domestic Saving in Ethiopia” Journal of Economics and Sustainable Development, Vo. 8, No. 5. |
| [23] | Gupta, G. S. (1988), “Growth variations across developing countries”: How much and why? Indian Economic Journal, Vol. 36, No. 3. |
| [24] | Hashm and Sedai (2016), “Domestic Savings and Economic Growth in India. I J A B E R, Vol. 14. |
| [25] | Hassen, B. (2017), “Factors Affecting Savings as Means of Economic Growth” Ethiopian Journal of Economics, Vol. 26, No 2. |
| [26] | Iheanacho, E. (2016), “The Contribution of Government Expenditure on Economic Growth of Nigeria Disaggregated Approach” International Journal of Economics & Management Sciences, Vol. 5, No. 5. |
| [27] | Jagadeesh, D. (2015), “The Impact of Savings on Economic Growth” An Empirical Study Based on Botswana. International Journal of Research in Business Studies and Management, Vol. 2, No. 19. |
| [28] | Japheth, T, et al (2014), “Cointegration Analysis of Public Expenditure on Tertiary Education and Economic Growth in Nigeria” CBN Journal of Applied Statistics Vol. 5 No. 2. |
| [29] | John, L and George, (2005), “Government Expenditure and Economic Growth” Evidence from Trivariate Causality Testing, Journal of Applied Economics, Vol. 8, No. 1. |
| [30] | Lawrence, U. et al (2019), “Government Expenditure and Economic Growth: The Case of Nigeria, Proceedings of SOCIOINT, 6th International Conference on Education, Social Sciences and Humanities. |
| [31] | Manh, V. (2005), “The Effects of FDI and Public Expenditure on Economic Growth: From Theoretical Model to Empirical Evidence, GSICS Working Paper Series. |
| [32] | Mathias and Wilson (2019), Effect of Gross Domestic Savings on Economic Growth in Nigeria, International Journal of Economic, Commerce and Management, Vol. 7, No. 7. |
| [33] | Najarzadeh, R. et al (2014), “Relationship between Savings and Economic Growth”; The Case for Iran. Journal of International Business and Economics, Vol. 2, No. 4. |
| [34] | Norashida, O. et al 2018), “Impact of Government Spending on FDI Inflows” the case of AESAN-5, China and India; International Journal of Business and society, Vol. 19, No. 2. |
| [35] | Nwaogu, U. G and Michael, J. R. (2015), “FDI, foreign AID, remittances and economic growth in developing countries” Review of Developing Economics, Vol. 19. |
| [36] | Odionye, and Ugwuegbe, U. (2016), “Savings and Economic Growth Nexus: Evidence from Nigeria” Developing Country Studies, Vol. 6. |
| [37] | Okere, P. et al (2019), “Government Expenditure and Economic Growth in Nigeria” International Journal of Economics and Financial Management, Vol. 4 No. 2. |
| [38] | Olayungbo, D. and Olayemi, O. (2018), “Dynamic Relationship among Non-oil Revenue, Government Spending and Economic Growth in an Oil Producing Country” Evidence from Nigeria, Future Business Journal, Vol. 4. |
| [39] | Panagiotis, P (2018), “The Effect of Government Debt and Other Determinants on Economic Growth” The Greek Experience, Journal of Economies, Vol. 6, No. 1. |
| [40] | Pickson, R. et al (2017), “Savings Growth Nexus in Ghana:” Co integration and Causal Relationship Analyses. Theoretical Economics Letters, Vol. 7. |
| [41] | Piotr, M. (2011), “The Relationship Between Savings and Economic Growth in Countries with Different Level of Economic Development, efinanse, Financial Internet Qurterly. |
| [42] | Segun (2019), “The rising government expenditure in Nigeria”; Any influence on growth. Nigerian Institute of Social Economic Research. |
| [43] | Serhan and Nermin (2010), “Are domestic savings and economic growth correlated?” Evidence from a sample of Central and East European countries, Problems and Perspectives in Management, Vol. 8, No. 3. |
| [44] | Simionescu, M. (2016), “The Impact of BREXIT on the Foreign Direct Investment Economic Theories”. Retrieved January 2018. |
| [45] | Society & Management Review, 6 (1). |
| [46] | Soleimani, D. et al (2016), “Foreign direct investments and gross domestic product development in USA” International Journal of Economics and Financial Issues, Vol. 6, No. 3. |
| [47] | Stephen, E. and Obah, D. (2017), “Impact of National Savings on Economic Growth in Nigeria (1990-2015)” International Journal of Economics and Business Management, Vol. 3, No. 4. |
| [48] | Taban, S. (2010), “An Examination of the Government Spending and Economic Growth Nexus for Turkey Using Bound Test Approach” International Research Journal of Finance and Economics, Vol. 48. |
| [49] | Vu Le, M. and Suruga, T. (2005), “Foreign Direct Investment, Public Expenditure and Economic Growth” The Empirical Evidence for the Period 1970-2001, Applied Economic Letters, Vol. 12. |
| [50] | Wagner, A. (1893), “Grundlegung der Politischen Okonomie” 3rd ed., Leipzig, C. F. Winter. |
| [51] | Yusuf S. et al (2015), “Analysis of Impact of Sectoral Government Expenditures on Economic Growth in Nigeria” Bound Test Cointegration Approach, European Journal of Business and Management, Vol. 7, No. 12. |
| [52] | Zelalem, A. (2018), “Analysis of the Nexus between Gross Domestic Savings and Economic Growth in Ethiopia” Evidence from Toda-Yamamoto Causality Approach, International Journal of Current Research and Academic Review, Vol. 6, No. 9. |
APA Style
Felicia Abada, Charles Manasseh. (2020). Government Expenditure, Savings, FDI and Economic Growth: An Impact Analysis. Journal of Investment and Management, 9(4), 92-99. https://doi.org/10.11648/j.jim.20200904.11
ACS Style
Felicia Abada; Charles Manasseh. Government Expenditure, Savings, FDI and Economic Growth: An Impact Analysis. J. Invest. Manag. 2020, 9(4), 92-99. doi: 10.11648/j.jim.20200904.11
AMA Style
Felicia Abada, Charles Manasseh. Government Expenditure, Savings, FDI and Economic Growth: An Impact Analysis. J Invest Manag. 2020;9(4):92-99. doi: 10.11648/j.jim.20200904.11
Share This Article
Twitter
Linked In
Facebook
Copy
Download@article{10.11648/j.jim.20200904.11,
author = {Felicia Abada and Charles Manasseh},
title = {Government Expenditure, Savings, FDI and Economic Growth: An Impact Analysis},
journal = {Journal of Investment and Management},
volume = {9},
number = {4},
pages = {92-99},
doi = {10.11648/j.jim.20200904.11},
url = {https://doi.org/10.11648/j.jim.20200904.11},
eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jim.20200904.11},
abstract = {This study investigates the impact of government expenditure, savings, FDI on economic growth in Nigeria for 1995 to 2018. The data for the study was sourced from World Bank’s World Development Indicator, while OLS estimating technique was employed for the analysis. Using OLS estimator, the empirical evidence from the findings show that government expenditure, savings, FDI significantly impacted economic growth. Therefore, government expenditure, savings, foreign direct investments are key determinants of economic growth in Nigeria. Based on the findings, we suggest that the Nigerian government should reduce the personal income tax so as to promote the disposal income and invariables savings. Also, effort should be made to promote stable and less volatile macroeconomic environment for the attraction of foreign direct investment inflow into Nigeria. This in turn could boost employment and increase in income and the individual savings. Further, we found government expenditure to negatively relate to economic growth. Hence, government spending in itself is not bad but should be utililize efficiently to help drive economic growth. Hence, we suggest that government spending should be reduced since it does not contribute immensely to the growth of the economy.},
year = {2020}
}
TY - JOUR T1 - Government Expenditure, Savings, FDI and Economic Growth: An Impact Analysis AU - Felicia Abada AU - Charles Manasseh Y1 - 2020/12/31 PY - 2020 N1 - https://doi.org/10.11648/j.jim.20200904.11 DO - 10.11648/j.jim.20200904.11 T2 - Journal of Investment and Management JF - Journal of Investment and Management JO - Journal of Investment and Management SP - 92 EP - 99 PB - Science Publishing Group SN - 2328-7721 UR - https://doi.org/10.11648/j.jim.20200904.11 AB - This study investigates the impact of government expenditure, savings, FDI on economic growth in Nigeria for 1995 to 2018. The data for the study was sourced from World Bank’s World Development Indicator, while OLS estimating technique was employed for the analysis. Using OLS estimator, the empirical evidence from the findings show that government expenditure, savings, FDI significantly impacted economic growth. Therefore, government expenditure, savings, foreign direct investments are key determinants of economic growth in Nigeria. Based on the findings, we suggest that the Nigerian government should reduce the personal income tax so as to promote the disposal income and invariables savings. Also, effort should be made to promote stable and less volatile macroeconomic environment for the attraction of foreign direct investment inflow into Nigeria. This in turn could boost employment and increase in income and the individual savings. Further, we found government expenditure to negatively relate to economic growth. Hence, government spending in itself is not bad but should be utililize efficiently to help drive economic growth. Hence, we suggest that government spending should be reduced since it does not contribute immensely to the growth of the economy. VL - 9 IS - 4 ER -
Information
Email: