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ROLE OF GOVERNANCE IN EXPLAINING DOMESTIC INVESTMENT IN NIGERIA
Author(s) -
AKANBI OLUSEGUN A.
Publication year - 2012
Publication title -
south african journal of economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.502
H-Index - 31
eISSN - 1813-6982
pISSN - 0038-2280
DOI - 10.1111/j.1813-6982.2012.01320.x
Subject(s) - corporate governance , investment (military) , estimation , economics , business , macroeconomics , economic system , finance , political science , law , management , politics
This study examines the determinants of domestic investment in Nigeria with a special focus on the role of governance. The estimations are carried out with time series data from 1975 to 2009 using the Johansen estimation techniques. The results conform to the findings of existing literature that real output, user cost of capital and level of financial development are significant determinants of domestic investment in Nigeria. The distinctive feature of the paper is the significant role played by governance in explaining the long‐term pattern of domestic investment in Nigeria. The results from the long‐run estimation and the impulse responses revealed that a well‐structured and stable socio‐economic environment will boost domestic investment over the long run. Therefore, in modelling domestic investment for Nigeria, it is imperative to incorporate the significant role played by governance. 1