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Effects of Government Expenditure on Private Investment in Nigerian Economy (1980–2016)

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  • Taiwo Akinlo
  • Olusola Joel Oyeleke

Abstract

This study examined the effect of government expenditure on private investment in Nigeria during the period 1980–2016. The error correction model analysis was used in the study to analyze the relationship between the two variables. The study found that there is a long-run relationship among the variables and that the interest rate and inflation have negative but significant impact on private investment in the long run. On the other hand, government expenditure has positive but insignificant impact on private investment in the long run. In the short run, government expenditure and interest rate have a significant positive impact on private investment in Nigeria, while GDP per capita and inflation negatively impact private investment. The study concluded that there is the need for the government to increase its expenditure particularly on the provision of more infrastructural facilities as this will attract more investment from within and outside the country.

Suggested Citation

  • Taiwo Akinlo & Olusola Joel Oyeleke, 2018. "Effects of Government Expenditure on Private Investment in Nigerian Economy (1980–2016)," Emerging Economy Studies, International Management Institute, vol. 4(2), pages 147-156, November.
    • Handle: RePEc:sae:emecst:v:4:y:2018:i:2:p:147-156
    DOI: 10.1177/2394901518795067
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    References listed on IDEAS

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    Cited by:

    1. Yusuf Abdulkarim, 2023. "A systematic review of investment indicators and economic growth in Nigeria," Palgrave Communications, Palgrave Macmillan, vol. 10(1), pages 1-13, December.
    2. Eslon Ngeendepi & Andrew Phiri, 2021. "Do FDI and Public Investment Crowd in/out Domestic Private Investment in the SADC Region?," Managing Global Transitions, University of Primorska, Faculty of Management Koper, vol. 19(1 (Spring), pages 3-25.
    3. Idowu, Obakemi Funsho & Okiri, Inyang John & Olarewaju, Hassan Ismail, 2020. "Revisiting Government Expenditure and Private Investment Nexus: An ARDL Approach," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 54(1), pages 181-192.
    4. Raymond Osi Alenoghena & Samuel David Adebisi & Ayobola Olufolake Charles, 2022. "Fiscal Policy and Macroeconomic Variables in Africa: A Bayesian VAR Approach," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 6(12), pages 731-741, December.

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