FISCAL POLICY MANAGEMENT AND PRIVATE INVESTMENT IN NIGERIA: CROWDING-OUT OR CROWDING-IN EFFECT?

<p>The Nigerian government over the years embarked on diverse macroeconomic policy options to tinker the economy on the path of growth and development. Amongst the policy options readily employed is that of fiscal policy. Despite the lofty place of fiscal policy in the management of the Nigeri...

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Autor principal:	Segun Subair Awode
Formato:	article
Lenguaje:	EN
Publicado:	Universitas Muhammadiyah Yogyakarta 2019
Materias:	fiscal management private investment, macroeconomic policy economic development Economic theory. Demography HB1-3840
Acceso en línea:	https://doaj.org/article/1b199b6b9322482f999cb40877265f86
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spelling	oai:doaj.org-article:1b199b6b9322482f999cb40877265f862021-12-02T11:09:33ZFISCAL POLICY MANAGEMENT AND PRIVATE INVESTMENT IN NIGERIA: CROWDING-OUT OR CROWDING-IN EFFECT?1411-99002541-5506https://doaj.org/article/1b199b6b9322482f999cb40877265f862019-04-01T00:00:00Zhttps://journal.umy.ac.id/index.php/esp/article/view/5667https://doaj.org/toc/1411-9900https://doaj.org/toc/2541-5506<p>The Nigerian government over the years embarked on diverse macroeconomic policy options to tinker the economy on the path of growth and development. Amongst the policy options readily employed is that of fiscal policy. Despite the lofty place of fiscal policy in the management of the Nigerian economy, the economy is yet to come on the path of sound growth and development. The intent of fiscal management is essentially to stimulate economic and social development by pursuing a policy stance that ensures a sense of balance between taxation, expenditure and borrowing that is consistent with sustainable growth. However, the extent to which fiscal management engenders private investment continues to attract theoretical and empirical debate especially in developing countries like Nigeria. In light of this, the present study fills the gap by examining the relationship between fiscal management and private investment in Nigeria between 1987 and 2015. The study employed ex-post facto research design. Secondary time series data were used for the study and these were sourced from CBN statistical bulletin and World Development Indicators, 2015. The data collected were analyzed using the Autoregressive Distributed Lag with inferences drawn at 5% significance level. The result of the relationship between fiscal management and private investment in Nigeria showed that inflation, capital expenditure, indirect tax and non-tax revenue had positive and significant effects on private investment (β=0.02, t=19.04; β=0.59, t=40.13; β=1.70, t=17.07; β=1.05, t=22.03 respectively) in Nigeria, while domestic credit to private sector had negative but significant effect on private investment (β = -0.09, t = -17.26) in Nigeria within the period. The study concluded that a crowding-in relationship exists between capital expenditure and private investment, while indirect tax revenue has significant and non-distortionary relationship with private investment. The study therefore recommends more public investment in capital projects and that the tax system should generally be made favorable towards private sector investment.</p>Segun Subair AwodeUniversitas Muhammadiyah Yogyakartaarticlefiscal managementprivate investment, macroeconomic policyeconomic developmentEconomic theory. DemographyHB1-3840ENJurnal Ekonomi & Studi Pembangunan, Vol 20, Iss 1, Pp 11-26 (2019)
institution	DOAJ
collection	DOAJ
language	EN
topic	fiscal management private investment, macroeconomic policy economic development Economic theory. Demography HB1-3840
spellingShingle	fiscal management private investment, macroeconomic policy economic development Economic theory. Demography HB1-3840 Segun Subair Awode FISCAL POLICY MANAGEMENT AND PRIVATE INVESTMENT IN NIGERIA: CROWDING-OUT OR CROWDING-IN EFFECT?
description	<p>The Nigerian government over the years embarked on diverse macroeconomic policy options to tinker the economy on the path of growth and development. Amongst the policy options readily employed is that of fiscal policy. Despite the lofty place of fiscal policy in the management of the Nigerian economy, the economy is yet to come on the path of sound growth and development. The intent of fiscal management is essentially to stimulate economic and social development by pursuing a policy stance that ensures a sense of balance between taxation, expenditure and borrowing that is consistent with sustainable growth. However, the extent to which fiscal management engenders private investment continues to attract theoretical and empirical debate especially in developing countries like Nigeria. In light of this, the present study fills the gap by examining the relationship between fiscal management and private investment in Nigeria between 1987 and 2015. The study employed ex-post facto research design. Secondary time series data were used for the study and these were sourced from CBN statistical bulletin and World Development Indicators, 2015. The data collected were analyzed using the Autoregressive Distributed Lag with inferences drawn at 5% significance level. The result of the relationship between fiscal management and private investment in Nigeria showed that inflation, capital expenditure, indirect tax and non-tax revenue had positive and significant effects on private investment (β=0.02, t=19.04; β=0.59, t=40.13; β=1.70, t=17.07; β=1.05, t=22.03 respectively) in Nigeria, while domestic credit to private sector had negative but significant effect on private investment (β = -0.09, t = -17.26) in Nigeria within the period. The study concluded that a crowding-in relationship exists between capital expenditure and private investment, while indirect tax revenue has significant and non-distortionary relationship with private investment. The study therefore recommends more public investment in capital projects and that the tax system should generally be made favorable towards private sector investment.</p>
format	article
author	Segun Subair Awode
author_facet	Segun Subair Awode
author_sort	Segun Subair Awode
title	FISCAL POLICY MANAGEMENT AND PRIVATE INVESTMENT IN NIGERIA: CROWDING-OUT OR CROWDING-IN EFFECT?
title_short	FISCAL POLICY MANAGEMENT AND PRIVATE INVESTMENT IN NIGERIA: CROWDING-OUT OR CROWDING-IN EFFECT?
title_full	FISCAL POLICY MANAGEMENT AND PRIVATE INVESTMENT IN NIGERIA: CROWDING-OUT OR CROWDING-IN EFFECT?
title_fullStr	FISCAL POLICY MANAGEMENT AND PRIVATE INVESTMENT IN NIGERIA: CROWDING-OUT OR CROWDING-IN EFFECT?
title_full_unstemmed	FISCAL POLICY MANAGEMENT AND PRIVATE INVESTMENT IN NIGERIA: CROWDING-OUT OR CROWDING-IN EFFECT?
title_sort	fiscal policy management and private investment in nigeria: crowding-out or crowding-in effect?
publisher	Universitas Muhammadiyah Yogyakarta
publishDate	2019
url	https://doaj.org/article/1b199b6b9322482f999cb40877265f86
work_keys_str_mv	AT segunsubairawode fiscalpolicymanagementandprivateinvestmentinnigeriacrowdingoutorcrowdingineffect
_version_	1718396155872673792

FISCAL POLICY MANAGEMENT AND PRIVATE INVESTMENT IN NIGERIA: CROWDING-OUT OR CROWDING-IN EFFECT?

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