ISSN: 2222-6990
Open access
In response to inconclusive findings by extant empirical studies on government spending-economic growth nexus, this study explores the effects of aggregate public expenditure, recurrent government expenditure and capital government expenditure on economic growth, and the effect of economic growth on aggregate public expenditure. Using a time series data set from Nigerian context for the period between 1981 and 2018 and analysing same with OLS regression model after a pre-estimation unit root test, an impressive results emerged. First, the study found that whereas aggregate public expenditure positively affects economic growth, recurrent government expenditure and capital government expenditure have insignificant effects on economic growth. Second, the study found that economic growth positively affects government spending. These results offer an insight that would enable fiscal policy makers to insist on improved government spending.
Alshahrani, S. A., & Alsadiq, A. J. (2014). Economic Growth and Government Spending in Saudi Arabia: an Empirical Investigation, International Monetary Fund WP.
Artkinson, B., Baker, P., & Milward, B. (1996). Economic Policy. London: MACMILLIAN Press Ltd.
Akrani G. (2011a). Wagner Law of Increasing State Activity- Public expenditure. Retrieved from https://kalyan-city.blogspot.com/2011/02/wagner-law-of-increasing-state-activity.html
Akrani, G. (2011b). What is Public Expenditure? Meaning, Definition. Retrieved from https://kalyan-city.blogspot.com/2011/02/what-is-public-expenditure-meaning-and.html
Case, K. E., Fair, R. C., & Oster, S. M. (2013). Principles of Economics. 10thEdt., England: Pearson Education Ltd.
Colander, D. C. (2010). Economics (Eight Ed.). USA: McGraw-Hill Companies Inc.
Dandan, M. M. (2011). Government Expenditures and Economic Growth in Jordan. 2011 International Conference on Economics and Finance Research IPEDR, 4, 467-471.
Darwish, S., Ahmed, U., & Pahi, M. H. (2020). Innovative Work Behavior During COVID-19 for Medical Representative in the Pharmaceutical Industry: Test of a Moderation Model in Bahrain. International Journal of Pharmaceutical Research. 12(4), 1927-1934. doi.org/10.31838/ijpr/2020.12.04.277
Devarajan, S., Swoop, V., & Zou, H. (1996). The composition of public expenditure and economic growth. Journal of Monetary economics, 37, 313-344.
Egbetunde, T., & Fasanya, I. O. (2013). Public Expenditure and Economic Growth in Nigeria:Evidence from Auto-Regressive Distributed Lag Specification. Zagreb International Review of Economics & Business, 16( 1),.79-92,
Frank, R. H., & Bernanke, B. S. (2013). Principles of Economics. 5thEdt., New York: McGraw-Hill.
Gong, L., & Zou, H. (2002).Effects of Growth and Volatility in Public Expenditures on Economic Growth: Theory and Evidence. Annals of Economics and Finance, 3, 379–406.
Iyodo, B. Y., Samuel, S. E., Adewole, C., & Ola, P. O. (2020). Impact of Non-life Insurance Penetration on the Economic Growth of Nigeria. Research Journal of Finance and Accounting, 11(2), 40-50.
Kweka, J. P., & Morrissey, O. (2000). Government Spending and Economic Growth in Tanzania, 1965-1996. UK: Centre for Research in Economic Development and International Trade, University of Nottingham.
Loizides, J., & Vamvoukas, G. (2005). Government Expenditure and Economic Growth: Evidence fromTrivariate Causality Testing,Journal of Applied Economics, 8(1), 125-152.S
Muthui, J. N., Kosimbei, G., Maingi, J., & Thuku, G. K. (2013). The Impact of Public Expenditure Components on Economic Growth in Kenya 1964-2011.International Journal of Business and Social Science, 4(4),233-253.
Nworji, I. D., Okwu, A. T., Obiwuru, T. C., & worji, L. O. (2012). ‘Effects of Public Expenditure on Economic Growth in Nigeria: a disaggregated time series analysis. International Journal of Management Sciences and Business Research, 1(7), 1-15.
Ofili, E. G. (2014). Basics and Computation of Rebased Gross Domestic Product (GDP) Nigeria's Experience. Bullion (CBN Publication), 38(2), 47- 53.
Okoro A. S. (2013). Government Spending and Economic Growth in Nigeria, (1980-2011), Global Journal of Management and Business Research, 13(5), 21-30
Oni, A. A., & Ozemhoka, A. M.(2014). Impact of Public Expenditure on the Growth of Nigerian Economy. European Scientific Journal, 10(28), 219-229.
Oyinlola, M. A., & Akinnibosun, O. (2013), Public expenditure and economic growth nexus: Further evidence from Nigeria. Journal of Economics and International Finance, 5(4), 146-154.
Tucker, I. V. (2009). Essentials of Economics (sixth Ed.). USA: South-Western Cenage Learning.
Taiwo, M. (2011). Government Expenditure and Economic Development: Empirical Evidence from Nigeria. European Journal of Business and Management, 3(9), 2011, 18-28.
Uchenna, E., & Evans, O. S. (2012). Government Expenditure in Nigeria: An Examination of Tri-Theoretical Mantras. Journal of Economic and Social Research, 14(2), 27-52.
Wijeweera, A., & Garis, D. (2009). Wagner’s law and social welfare: the case of the kingdomof saudiarabia. Applied Econometrics and International Development, 9(2), 199-209
Yilgör, M., Erturul, C., & Celepciolu, M. E. (2012). The Effect of Public Expenditure on Economic Growth: Turkey example. Investment Management and Financial Innovations, 9(2), 193- 202.
In-Text Citation: (Onuoha, & Okoye, 2020)
To Cite this Article: Onuoha, N. E., & Okoye, G. O. (2020). Public Expenditure and Economic Growth Relationship: Further Evidence from Nigerian Context. International Journal of Academic Research in Business and Social Sciences. 10(11), 616-627.
Copyright: © 2020 The Author(s)
Published by HRMARS (www.hrmars.com)
This article is published under the Creative Commons Attribution (CC BY 4.0) license. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this license may be seen at: http://creativecommons.org/licences/by/4.0/legalcode