Open AccessGovernment Expenditure and Economic Growth Nexus: Evidence from Nigeria
Author(s) -
Leye Sherifdeen Oyediran,
Ibrahim Sanni,
Lukman Adedoyin,
Oyewole Olabode Michael
Publication year - 2016
Publication title -
business and management research
Language(s) - English
Resource type - Journals
eISSN - 1927-601X
pISSN - 1927-6001
DOI - 10.5430/bmr.v5n4p56
Subject(s) - capital expenditure , economics , nexus (standard) , aggregate expenditure , government spending , government (linguistics) , government expenditure , gross domestic product , human capital , ordinary least squares , public expenditure , gross fixed capital formation , public economics , development economics , economic growth , public finance , macroeconomics , finance , econometrics , market economy , linguistics , philosophy , computer science , welfare , embedded system
The need to better the lots of citizens through government expenditure has raised questions on the impact of government expenditure on the economic development and growth of nations. It is against this background that this paper examined the antecedent effect of government spending on the Nigerian economic growth. The general objective of the study is to ascertain the relationship between government expenditure and economic growth in Nigeria; specifically, the study examined: (i) the significance influence of government capital expenditure on economic growth in Nigeria and (ii) the significance influence of government recurrent expenditure on economic growth in Nigeria. The study employed ordinary least square (OLS) multiple regression analysis in estimating the specified model, with the Gross Domestic Product (GDP) as the dependent variable, while Capital Expenditure (CAPEXP) and Recurrent Expenditure (REXP) are the independent variables. Data between 1980 – 2013 were collected from secondary sources through the National Bureau of Statistics (NBS) and Central Bank of Nigeria (CBN). Results showed that in Nigeria, there exist a significant relationship between the government expenditure and economic growth. The study therefore recommends instilling fiscal discipline in government expenditures, and putting in place structural mechanisms to act as surveillance on capital spending so as to boost the nation’s human and social capital.