scholarly journals Disaggregated Analysis of Foreign Trade Impact on Economic Growth; Reflecting on the Nigeria Experience

2019 ◽  
pp. 1-15
Author(s):  
Dada, Matthew Abiodun
Keyword(s):  
Economic Growth ◽  
Foreign Trade ◽  
Negative Impact ◽  
Positive Impact ◽  
Consumer Price Index ◽  
Government Expenditure ◽  
Cointegration Analysis ◽  
Consumer Prices ◽  
Oil Export ◽  
Oil Sector

This study conducted a disaggregated analysis of foreign trade impact on economic growth using Nigeria historical data. The data used spans the period 1981-2017 on variables such as foreign trade decomposed into four components namely; oil import, oil export, non-oil import, and non-oil export. Others are GDP, aggregated government expenditure data and consumer price index. The variables were sourced from the Central Bank of Nigeria [CBN] Statistical Bulletin [latest edition] augmented with World Development Indicator [WDI], latest version and CBN Annual Report [various issues].  Models were formulated with and without recession dummy variable and estimated using (FMOLS) technique. Variables were tested and found to be non-stationary at level. They become stationary after first differencing, meaning that all variables exhibit a I[1] process. The group of I(1) variables were found to be cointegrated after testing for cointegration following a multivariate cointegration analysis proposed by Johansen and Juselius [20]. The result shows that non-oil trade has positive impact on growth while oil trade has negative impact on growth. The negative impact of oil trade declines marginally in recession period.  Both government expenditure and consumer prices have significant positive impact on economic growth. This study strongly recommends that government in her effort to diversifying and repositioning the Nigerian economy should give urgent attention to the non-oil sector in order to boost trade in this sector to enhance economic growth. The study therefore concluded that foreign trade impact on economic growth in Nigeria depends largely on the magnitude of foreign trade resulting from non-oil export.

scholarly journals The Effect of Foreign Direct Investment and Foreign Trade on Gross Domestic Product in Eurasian Countries: Panel Cointegration Analysis

2013 ◽  
Author(s):  
Mehmet Songur ◽  
Demet Yaman
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Foreign Trade ◽  
Direct Investment ◽  
Negative Impact ◽  
Positive Impact ◽  
Panel Cointegration ◽  
Research Area ◽  
Cointegration Analysis ◽  
Annual Data

In recent years, with the phenomenon of globalization, both foreign trade and foreign direct investment have become important factors that impact on economic growth. The effect of foreign trade and foreign direct investment on economic growth has been an important research area for many economists. For this purpose, this study investigates the effects of foreign direct invesment and foreign trade on economic growth, with the help of Pedroni Panel Cointegration Analysis,for 9 Eurasian countries using annual data for the period 1995-2011.The results show that in analyzed countries, there has been a long-term relationship between the variables. The results of cointegration coeffficients show that, import and export has a negative impact but foreign direct invesment has a positive impact on GDP. From these results, Eurasian economies on one hand should develop policies to increase the effeciency of foreign direct invesment and increase foreign trade. On the other hand Eurasian economies should improve policies to increase the economic and human infrastructure.

The effectiveness of government expenditure on economic growth in Botswana

2019 ◽  
Vol 10 (3) ◽  
pp. 368-384 ◽  
Author(s):  
Kafayat Amusa ◽  
Mutiu Abimbola Oyinlola
Keyword(s):  
Economic Growth ◽  
Government Spending ◽  
Negative Impact ◽  
Positive Impact ◽  
Government Expenditure ◽  
Public Spending ◽  
Empirical Literature ◽  
Content Type ◽  
Long Run ◽  
Short Run

Purpose The purpose of this paper is to examine the relationship between government expenditure and economic growth in Botswana over the period 1985‒2016. The study employed the auto-regressive distributed lag (ARDL) bounds testing approach in investigating the nexus. The study makes the argument that the effectiveness of public spending should be assessed not only against the amount of the expenditure but also by the type of the expenditure. The empirical findings showed that aggregate expenditure has a negative short-run and positive long-run effect on economic growth. When expenditure is disaggregated, both forms of expenditures have a positive short-run effect on economic growth, whereas only a long-run positive impact of recurrent expenditure is observed. The study suggests the need to prioritize scarce resources in productive recurrent and development spending that enables increased productivity. Design/methodology/approach This study examined the effectiveness of government spending in Botswana, within an ARDL framework from 1985 to 2016. To achieve this, the analysis is carried out on both an aggregate and disaggregated level. Government spending is divided into recurrent and development expenditures. Findings This study examined the effectiveness of government spending in Botswana, within an ARDL framework from 1985 to 2016. To achieve this, the analysis hinged on both the aggregate and disaggregated levels. The results of the aggregate analysis suggest that total public expenditure has a negative impact on economic growth in the short run; however, its impact becomes positive over the long run. On disaggregating government spending, the results show that both recurrent and development expenditures have a significant positive short-run impact on growth; however, in the long run, the significant positive impact is only observed for recurrent expenditure. Practical implications The results provide evidence of the diverse effects of government expenditure in the country. In the period under investigation, 73 percent of total government expenditure in Botswana was recurrent in nature, whereas 23 percent was related to development. From the results, it can be observed that although the recurrent expenditure has contributed to increased growth and must be encouraged, it is also pertinent for the Botswana Government to endeavor to place more emphasis on productive development expenditure in order to enhance short- and long-term growth. Further, there is a need to strengthen the growth-enhancing structures and to prioritize the scarce economic resources toward productive spending and ensuring continued proper governance over such expenditures. Originality/value The study provides empirical evidence on the effectiveness of government spending in a small open, resource-reliant middle-income SSA economy and argues that the effectiveness of public spending must be assessed not only against the amount of the expenditure but also on the type or composition of the expenditure. The study contributes to the scant empirical literature on Botswana by employing the ARDL approach to cointegration technique in estimating the long- and short-run impact of government expenditure on economic growth between 1985 and 2016.

scholarly journals Remittances Impact on Economic Growth, Domestic Savings and Domestic Capital at the Presence of ODA and FDI in Selected MENA Countries

2016 ◽  
Vol 3 (2) ◽  
pp. 26 ◽  
Author(s):  
Mahmoud Mohammed Sabra
Keyword(s):  
Economic Growth ◽  
Negative Impact ◽  
Positive Impact ◽  
Government Expenditure ◽  
Host Countries ◽  
Mena Countries ◽  
Domestic Capital ◽  
Domestic Savings ◽  
Seeking Behavior ◽  
The Impact

<p>This article investigates the impact of remittances on economic growth, investment and domestic savings in selected MENA labor exporting countries. The estimations have been done in the presence of other international capital inflow, which are foreign aid and foreign direct investment. A multiple equations model estimated simultaneously using different techniques. We found a positive impact of remittances on both growth and investment, meanwhile a negative impact on domestic savings. Aid impacts negatively on both growth and savings where it finance consumption instead of investment and enhance rent seeking behavior. Government expenditure and FDI are important source of growth. We recommended that policies for encouraging final use of productive investment of remittances. In addition, enhancing more project of migrant in home country that may facilitate their trade with host countries. Finally, more efficient allocation of aid is requires, and attracting more FDI.</p>

scholarly journals The Impact of Public Expenditure on Economic Growth: A Review of International Literature

2019 ◽  
Vol 19 (2) ◽  
pp. 81-101
Author(s):  
Sheilla Nyasha ◽  
Nicholas M. Odhiambo
Keyword(s):  
Economic Growth ◽  
Empirical Evidence ◽  
Government Spending ◽  
Public Expenditure ◽  
Negative Impact ◽  
Positive Impact ◽  
Government Expenditure ◽  
Empirical Literature ◽  
The Impact ◽  
The Relationship

Abstract Research background: Although a number of studies have been conducted on the relationship between public expenditure and economic growth, it is difficult to tell with certainty whether or not an increase in public expenditure is good for economic growth. This lack of consensus on the results of the previous empirical findings makes this study of paramount importance as we take stock of the available empirical evidence from the 1980s to date. Purpose: In this paper, theoretical and empirical literature on the relationship between government expenditure and economic growth has been reviewed in detail. Focus was placed on the review of literature that assessed the impact of government spending on economic growth. Research Methodology: This study grouped studies on the impact of public expenditure on economic growth based on their results. Three groups emerged – positive impact, negative impact and no impact. This was followed by a review of each relevant study and an evaluation of which outcome was more prevalent among the existing studies on the subject. Results: The literature reviewed has shown that the impact of government spending on economic growth is not clear cut. It varies from positive to negative; with some studies even finding no impact. Although the impact of government spending on economic growth was found to be inconclusive, the scale tilts towards a positive impact. Novelty: The study provides an insight into the relationship between public expenditure and economic growth based on a comprehensive review of previous empirical evidence across various countries since the 1980s.

scholarly journals Causal nexus between fiscal deficit and economic growth

2016 ◽  
Vol 4 (8) ◽  
pp. 1-19
Author(s):  
Ravinthirakumaran Navaratnam ◽  
Kasavarajah Mayandy
Keyword(s):  
Economic Growth ◽  
Sri Lanka ◽  
South Asian ◽  
Negative Impact ◽  
Positive Impact ◽  
Cointegration Analysis ◽  
Annual Data ◽  
Fiscal Deficit ◽  
Asian Countries ◽  
The Impact

The impact of fiscal deficit on economic growth is one of the most widely debated issues among economists and policy makers in both developed and developing countries in the recent period. This paper seeks to examine the impact of fiscal deficit on economic growth in selected South Asian countries, namely, Bangladesh, India, Nepal, Pakistan and Sri Lanka using time series annual data over the period 1980 to 2014. The paper uses cointegration analysis, error correction modelling and Granger causality test under a Vector Autoregression (VAR) framework. The results from this study confirmed that the fiscal deficit has a negative impact on economic growth in the South Asian countries considered in this study except Nepal, which confirmed the positive impact. The results also highlighted that the direction of causality for the SAARC countries is mixed where fiscal deficit causes economic growth for Bangladesh, Nepal and Pakistan, but the reverse is true for India and Sri Lanka.  

scholarly journals The effects of government expenditure on sustainable economic growth in India: assessment of the circular economy

2021 ◽  
Vol 72 (01) ◽  
pp. 74-80
Author(s):  
SMITHA NAYAK ◽  
VARUN S.G. KUMAR ◽  
SUHAN MENDON ◽  
RAMONA BIRAU ◽  
CRISTI SPULBAR ◽  
...  
Keyword(s):  
Economic Growth ◽  
Social Services ◽  
Government Spending ◽  
Central Government ◽  
Negative Impact ◽  
Positive Impact ◽  
Government Expenditure ◽  
Secondary Data ◽  
Online Data ◽  
The Government

Government expenditure is linked to the economic growth and is the driving force of the every country. In the post liberalization era, India has been exposed to the dynamics of the world economy due to which India has witnessed a significant impact of Government spending on its economic growth. The objective of this paper is to investigate the effects of the Central Government spending on the growth of the Indian economy over a period, from 2006 to 2016. The online data disclosures of the various ministries have been the major source of secondary data. Co-integration analysis is adopted to evaluate the effect of individual sectorial spending on the economic growth and gross domestic product. The economic spending is classified into 5 sectors namely: General Services, Social Services, Economic Services, Grants in Aid & Contribution and Public debt & Loans for analysis, as disclosed by the sources. The analysis gives us an idea of the various sectors which have a positive impact and the sectors which have a negative impact. The results would play an instrumental role in exploring the sectors in which the government should invest more, thereby contributing to an enhancement in the country’s growth.

scholarly journals Foreign Investment, Government Expenditure, and Economic Growth in Malaysia

2010 ◽  
Author(s):  
Fatimah Said ◽  
Zarinah Yusof ◽  
Saad Mohd Said ◽  
Ahmad Farid OSMAN
Keyword(s):  
Economic Growth ◽  
Foreign Investment ◽  
Driving Forces ◽  
Negative Impact ◽  
Positive Impact ◽  
Government Expenditure ◽  
Real Income ◽  
Ordinary Least Squares ◽  
Gdp Per Capita ◽  
Per Capita

This study uses the ordinary least squares technique to examine the effect of foreign investment and government expenditure on the growth in GDP per capita in Malaysia over the period 1978-2005. The regression results showed that the growth of export and ratio of government expenditure to GDP are the driving forces in enhancing the economic growth in Malaysia. Foreign investment and previous year real income per capita growth depict positive impact, whereas population growth exerts a negative impact on economic growth.  

IMPACT OF NON-OIL FOREIGN TRADE ON ECONOMIC GROWTH IN NIGERIA

2021 ◽  
Vol 11 (1) ◽  
pp. 30-43
Author(s):  
Esiaka Chuka ◽  
◽  
Uwaleke Uche ◽  
Amana A. ◽  
◽  
...  
Keyword(s):  
Economic Growth ◽  
Foreign Trade ◽  
Negative Impact ◽  
Import Substitution ◽  
Productive Capacity ◽  
Ex Post ◽  
Long Run ◽  
Oil Export ◽  
Short Run ◽  
The Impact

This study probed the impact of non-oil foreign trade on economic growth of Nigeria within the period 1986 to 2018.The specific objectives of this research are to examine the impact of non-oil import on economic growth of Nigeria and the impact of non-oil export on economic growth in Nigeria. The study adopted the ex post facto research design. The data were sourced from Central Bank of Nigeria’s Statistical Bulletin. The study employed the Vector Error Correction Model (VECM) to investigate and analyze the long-run and short-run impact of non-oil foreign trade, proxy by non-oil export and non-oil import; on economic growth, proxy by gross domestic product (GDP). Findings revealed that in the long-run, increase in non-oil export and non-oil import will lead to decrease in the GDP. However, the VECM results indicate that, in the short-run, increase in non-oil import will lead to increase in the GDP, while increase in non-oil export in the short- run will lead to decrease in GDP. From the findings, this study concludes that non-oil import trade has a positive impact on GDP while non-oil export has a negative impact on GDP in Nigeria. This study recommends that Nigeria’s non-oil export should be heavily invested in non-oil high-earning productive sectors such as agriculture and mining. This will create a multiplier effect and increase the productive capacity of non-oil export for sustainable economic development in Nigeria. It is also recommended that non-oil import of Nigeria’s economy should be curtailed by making policies that will encourage import-substitution and enhance economic growth in Nigeria.

scholarly journals Implementasi Variabel Makro: Zakat, Infak Dan Shodaqah (Zis) Pada Pelaku Ekonomi Kreatif Makanan Siap Saji Berbasis Singkong

IQTISHODUNA ◽  
2020 ◽  
Vol 16 (2) ◽  
pp. 191-202
Author(s):  
Masyhuri Masyhuri.
Keyword(s):  
Economic Growth ◽  
Fast Food ◽  
Negative Impact ◽  
Positive Impact ◽  
Aggregate Demand ◽  
Government Expenditure ◽  
Basic Research ◽  
Creative Economy ◽  
Macro Variables ◽  
The Impact

The purpose of this study is the impact of macro variables on zakat, shodaqah and infaq (Zis) on economic growth (aggregate demand; AD). The initial impact is controlled from the macro variables of consumption, investment, saving  and government expenditure. This study is included in the basic research category because the level of technological readiness is 3 (three), namely at the laboratory level.  Analysis tools are carried out using a graphical and mathematical approach. The results showed that Zis has a sectoral impact on economic growth (AD). The consumption, investment, saving, government expenditure and export variables have a positive impact on AD. Likewise Zis role in economic growth is positive. Whereas interest money has a negative impact. Anticipation without using interest money in the economy is done by increasing economic activity through the implementation of 14 sharia transactions. One of them is the application of qardhul-hasan to the creative economy of cassava-based fast food creative, which shows that the acceleration of the value of the currency compared to the future value  can be created at 6.7 % -10% from before. That is why Zis besides having a positive impact on economic growth (AD) also gave birth to blessing as measured through 3 indicators of blessing, namely ni'mah, sa'adah (goodness) and ziyadah (additional).

scholarly journals The Impact of Natural Resource Rent on Economic Growth of Ghana

2020 ◽  
pp. 1-17
Author(s):  
Opoku Adabor ◽  
Emmanuel Buabeng ◽  
Godred Annobil-Yawson
Keyword(s):  
Economic Growth ◽  
Exchange Rate ◽  
Significant Relationship ◽  
Oil And Gas ◽  
Negative Impact ◽  
Positive Impact ◽  
Government Expenditure ◽  
Resource Rent ◽  
The Government ◽  
The Impact

This study examines the effect of oil and gas resource rent on economic growth of Ghana for the period of 2007 to 2019. The study uses the bounds test approach to cointegration within the framework of autoregressive distributed lags model as the estimation strategy. The results from the study revealed that oil resource rent had a negative and significant relationship with economic growth of Ghana. However, gas resource rent had a positive impact on economic growth of Ghana. Furthermore, the study also found that foreign direct investment and exchange rate had significant positive relation with economic growth of Ghana respectively. For government expenditure, it exerts a negative impact on economic growth of Ghana.  Based on the negative and significant relationship with oil resource rent and economic growth of Ghana, it is recommended that the government should reduce taxes on oil industries to help increase the production of oil and gas in Ghana. Furthermore, the study recommends Government and private partnership to ensure effective management of exchange rate fluctuations in Ghana.

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