22 research outputs found
Globalization and Per Capita Income Growth in Emerging Economies
No full textIn this study, the efficacy of globalization in influencing income growth within the Sub-Saharan Africa (SSA) from 1982 to 2020 is being examined. The “Konjunkturforschungsstelle Globalization Index” (KOFGI) was used to measure globalization at the overall, economic, social, and political level, while income growth was captured using the growth rate of gross national income per capita. The data employed in the analysis were gotten from World Bank and KOFGI database. The analysis follows a sequential order of unit root test based on the augmented Dickey-Fuller, autoregressive distributed lag (ARDL) bounds test for cointegration, and error correction model. The unit root test revealed that the order of integration of the variables were mixed at levels and first difference. The bounds test showcased that all the dimensions of globalization exhibited long-run association with income growth. The short-run result indicated that globalization wielded a negative and significant effect on income growth. A unit percent increase in globalization put forth a 1.3818% decrease in income growth. In the long-run, globalization however exerted a positive but insignificant sway on income growth in the SSA. The implication of this is that though globalization poses a short-run negative impact on income growth, the SSA can move along the learning curve to derive some long-term benefits that emanate from global interactions. It becomes pertinent for the SSA to see globalization as a long-term avenue for propelling income growth, bearing in mind that the short-run negative effect can be corrected periodically as the economy moves along the learning curve of globalization
Industrial Policies and Industrial Sector Performance in Nigeria
No full textThis paper looked at the various industrial policies that have been put in place in Nigeria in her quest for industrialization. The various policies ranges from export promotion, import substitution, and foreign direct investment industrialization policies. These policies have been diverse given the development plans that were put in place. For instance, the study looked at the various strategies that were put in place from the first development plan to the fourth development plan; along with the current Bank of Industry. The performance of the industrial sector has been reviewed right from 1981 to 2020, and we observed that there have been massive fluctuations in the performance of the industrial sector in the 2000s as compared to the 1980s and 1990s. For instance, industrial value added as a percentage of GDP stood at 39.245% and 37.71% for 1981 and 1992 respectively as compared to 27.383% and 28.221% for 2019 and 2020 respectively. The paper concludes that more synergies in industrial policies is required to drive up industrial performance in Nigeria
FERTILITY AND POPULATION EXPLOSION IN NIGERIA: DOES INCOME ACTUALLY COUNT?
No full textIn Nigeria, this study examined whether income matters in the influence of fertility on population growth from 1961 to 2020. Going specific, we inquired into the influence of fertility and income growth on population growth; the influence of fertility and income growth on birth rate; and the causal linkages between population growth, fertility, birth rate, life expectancy, and income growth. From the ‘Granger Causality test, no causality exists between income growth and population growth; but a one-way causality runs from population growth to birth rate. In the ‘ordinary least squares’ regression utilized in the study, we realized that income does not have any significant influence on population growth and birth rate; but fertility rate and life expectancy at birth wielded a direct and substantial effect on population growth. A 1% increase in fertility and life expectancy increased population growth by 0.4823% and 0.0615% on average and explains about 75.86% of the total variation in population growth. The bounds test shows that no long-run rapport exists between fertility and birth rate. The short-run estimates indicated changes in fertility wielded a positive and significant sway on birth rate, while life expectancy wielded a negative and significant sway on the birth rate. Still, income does not exert any significant influence on the birth rate. The policy implication of these findings is that to curtail population bang, there is a necessity to reduce the birth rate. This is because income does not play any significant role in the demand for children in Nigeria
Economic Growth in a Cross-Cultural Environment: Lessons for Selected African Countries
No full textIn this paper, we examined the effect of globalization on economic growth of 25 selected African countries for the period 1991 to 2017. The index of globalization utilized was the Konjunkturforschungsstelle (KOF) Index of Globalization that takes into consideration the economic, social, and political dimensions of globalization. The study also examined the effect of globalization on unemployment in Africa. The study employed the panel unit root test, cointegration test, ARDL vector error correction mechanism (VECM), and Granger Causality test techniques. The panel unit root test reported a mixed order of integration necessitating the use of the cointegration test. The Pedroni cointegration test and the Fisher-ADF test revealed the presence of a long run relationship between globalization and economic growth in Africa. Based on the VECM, it was observed that globalization exerts a positive and significant effect on economic growth in the long run but a negative and insignificant effect in the short run. Also, globalization exerted a positive and significant effect on unemployment in the long run while in the short run, the effect was negative and significant. The Dumitrescu Hurlin Panel Causality Tests revealed the existence of a bi-directional relationship between globalization and economic growth in Africa. The policy implication of the paper is that African countries should realize the long run importance of globalization as a powerful force that drives a modern economy hence, coherent policies should be developed and geared towards managing the excesses of globalization so as to be moving along with the ever evolving world. Keywords: Economic Globalization, Political Globalization, Foreign Direct Investment, Financial Liberalization, Panel Regression, Social Globalization DOI: 10.7176/JEP/11-24-05 Publication date: December 31st 2020
FINANCIAL DEEPENING AND ECONOMIC GROWTH IN NIGERIA: AN EMPIRICAL ANALYSIS
No full textThis paper examined the relationship between financial development and economic development in Nigeria using annual time series between 1981 and 2018. Financial development was captured with financial deepening indicator measured as a ratio of credit to the private sector to gross domestic product (GDP). The data were obtained from the 2018 Central Bank of Nigeria statistical bulletin. The study employed an econometric approach by incorporating Granger causality test, unit root test, Bounds test, and the error correction mechanism. Findings from the Granger causality test revealed that there exists a unidirectional causality that flows from financial development to economic development in Nigeria, implying that the supply-leading finance hypothesis was prevalent. Also, there exist both a shot-run and long-run positive and significant relationship between financial development (measured as a ratio of credit to private sector to GDP) and economic growth in Nigeria within the study period. It is in this light that the paper recommended that there is need for more financial market development that favours more credit to the private sector in order to stimulate economic growth. This can be achieved through strengthening the micro finance sector so as to make credits available and accessible to the micro entrepreneurs who are often deprived of credit by the conventional credit markets
Global Trends in Financial Sector-Led Industrialization: How did Nigeria Fare?
No full textThis study examined the influence of the financial sector on industrialization in Nigeria from 1981 to 2019. Specifically, the study examined the effect of financial sector development on industrialization; and also investigated the influence of industrialization on economic growth of Nigeria. Data were obtained from the Central Bank of Nigeria Statistical Bulletin and the World Development Indicators. The study utilized the Augmented Dickey-Fuller unit root test, Autoregressive Distributed Lag (ARDL) Bounds test for cointegration, and Error Correction Model. The unit root test reported that the variables were stationary at mixed order of levels I(O), and first difference I(1). This necessitated the use of the ARDL Bounds test for levels relationship. The result indicated that financial sector development exerted a negative and significant effect on industrialization in Nigeria; while a negative and significant effect of deindustrialization on economic growth was also observed. The ARDL Bounds test for conintegration validated the existence of a long-run equilibrium relationship between financial sector development and industrialization; and between industrialization and economic growth in Nigeria. The error correction model revealed that 56.98% of the short-run distortions in industrial productivity is corrected annually so that equilibrium is restored in the long-run; while 93.06% of the short-run distortions in economic growth is corrected annually. It was recommended that previous financial sector reforms should be consolidated to make the financial sector robust to support industrialization, which will propel growth in the Nigerian economy
The Service Sector-Led Growth Relationship: The Case of Nigeria
No full textThis paper examined the impact of the service sector on economic growth of Nigeria. The study covers the period 1981 to 2019 and data were obtained from the Central Bank of Nigeria statistical bulletin. The Augmented Dickey-Fuller unit root, Granger Causality test, Vector Autoregressive (VAR) approach, Bounds test for cointegration, and vector error correction mechanism were utilized in analysing the data. Findings of the study revealed that a bidirectional causality exist between service sector and economic growth of Nigeria. Meanwhile, the VAR result presented an evidence of weak exogeneity of the service sector in predicting economic growth. However, both broad money supply and total government expenditure exerted a significant impact on economic growth. From the impulse response function, it was discovered that economic growth responded negatively to shocks in service sector output both in the short run and in the long run; while the variance decomposition indicated that gross domestic product (a proxy for economic growth) is strongly endogenous in predicting itself in the short run while such diminishes in the long run. The Bounds test for cointegration revealed evidence of long run equilibrium relationship and the error correction mechanism revealed that 88.30% of the short run disequilibrium in the gross domestic product are corrected annually. Meanwhile, it was discovered that professional, scientific and technical services is the major contributor to economic growth as captured by its short run and long run elasticity coefficients of 0.5936 and 0.9455 respectively. The paper recommended the need for stimulating industrialization as this is the major pathway through which the service sector can positively impact economic growth
RURAL-URBAN POLARIZATION AND THE SUSTAINABLE DEVELOPMENT OF RURAL COMMUNITIES IN NIGERIA
No full textThe drive for development is desirable for any society given the benefits it renders to the citizen. Such benefit will only be equitable if all segments of the society are core beneficiaries. In this paper, the dichotomy that exists between the rural and urban centres in Nigeria is explored and data from reliable sources such as the World Bank and International Labour Organization were used in driving home our arguments. In the analysis, this paper has revealed that there has been a significant polarization between the urban and rural areas as reflected in key indicators like literacy rate, access to electricity, access to good water, and access to sanitation. This polarization exists irrespective of the fact that the rural population has been accounting for a greater proportion. This lack of balanced development has led to massive rural-urban drift which has exacerbated further socio-economic problems in the Nigerian society. It is critical to learn about the activities that rural residents engage in and to identify the problems that inhibit their communities' development. This will help to erode the high polarization existing between the rural and urban areas
An Estimation of Money Demand Function Using Nigerian Data: Implication for Monetary Policy
No full textThis study estimated Nigeria's Keynesian and augmented money demand function using time series variables from 1986 through 2021. The Keynesian money demand function is estimated by considering income and interest rates as the determinants of the money demand function. In contrast, the augmented money demand function incorporates critical variables like exchange rate, income, and interest rates. With the Robust Ordinary Least Squares estimation method, the income level exerted a positive and significant effect on money demand, while interest rate put forth a negative but insignificant impact. The a priori signs of these two variables align with the Keynesian postulation that income directly correlates with the actual money demand function. At the same time, the rate of interest has an inverse relationship.Further findings from the augmented money demand function, as reported by the autoregressive distributed lag short-run estimates, indicate that the price level and exchange rate directly and significantly affect Nigeria's current money demand function. The money demand function so estimated was reported to be stable, given the cumulative sum of squares result. A general conclusion that can be drawn from the findings is that the money demand function is income elastic but inelastic regarding interest rate, price level, and exchange rate.
Foreign Direct Investment Led Growth Hypothesis and Economic Development in Nigeria
No full textThis study was an inquiry into the nexus of the foreign-direct investment (FDI) led growth hypothesis, and how it translates into the development of the Nigerian economy as of 1970 – 2018. The study utilized secondary data from the ‘World Development Indicators’ which were analysed using the Bounds test for cointegration and the ‘autoregressive distributed lag (ARDL) approach to divulge both the short-term cum the long-term influence of foreign direct investment net inflow on ‘economic development’ of Nigeria. The Bounds test was conducted after the unit root test revealed that the variables were stationary at mixed order of level and first difference. The outcome of the ARDL Bounds test supported confirmation of long-term association among the variables. The ARDL short-run error correction showed that 14.62% of the instability in the model was corrected yearly. In the short-term, it was discovered that FDI wielded a deleterious and substantial weight on ‘economic development of Nigeria. Meanwhile, the long-term estimates indicated that FDI influenced economic development positively, though not in a significant manner. The Granger causality test supported the fact that FDI causes ‘economic development’ in Nigeria. Given this potential of FDI exerting a positive effect on ‘economic development’, the paper recommended that bottlenecks inherent in FDI influxes in the country should be removed so as to reap the fullest benefits of such inflows in Nigeria
