Fiscal Variables and Economic Growth in Oil-rich Developing Countries (1981-2013)

Olusi Janet; Dada Matthew Abiodun

doi:doi:10.11648/j.jwer.20150404.12

| Peer-Reviewed

Fiscal Variables and Economic Growth in Oil-rich Developing Countries (1981-2013)

Olusi Janet, Dada Matthew Abiodun

Published in Journal of World Economic Research (Volume 4, Issue 4)

Received: 23 June 2015 Accepted: 16 July 2015 Published: 10 August 2015

Views: Downloads:

Download PDF

Share This Article

Twitter
Linked In
Facebook

Abstract

This study examined the growth effect of fiscal variable specifically government expenditure in the oil-rich developing countries of Nigeria, Indonesia and Saudi Arabia. The study covered the period 1981 to 2013. The secondary data used for the study were fetched from World Development Indicators (WDIs) 2014 edition and Pen World Tables version 8.1. The variables included in the analysis include GDP, aggregate government expenditure, imports and exports of goods and services all in US dollar. Others include broad money as a percentage of GDP, annual inflation rate, annual growth rate of population and total population. We employed Time Series Econometric techniques of analysis. Long-run equilibrium relationships were found to exist between government expenditure and economic growth in all the three countries. The result also shows that government expenditures have positive and significant effects on economic growth. However, the magnitude of these effects varies across the three countries. This finding therefore called for the support for fiscal space hypothesis in these countries to boost economic growth. We therefore concluded that government expenditure among other variables enhanced economic growth in the oil-rich developing countries of Nigeria, Indonesia and Saudi Arabia during the period under investigation.

Published in	Journal of World Economic Research (Volume 4, Issue 4)
DOI	10.11648/j.jwer.20150404.12
Page(s)	99-108
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2024. Published by Science Publishing Group

Keywords

Fiscal Variables, Oil-rich Developing Countries, Long-run Equilibrium, Economic Growth

References

[1]	Abdullah, H.A. (2000). The Relationship between Government size and Economic Growth in Saudi Arabia. Journal of Administrative Science, 12(2): 173-191.
[2]	Abu, N. and Abdullahi, U. (2010). Government Expenditure and Economic Growth in Nigeria, 1970-2008: A Disaggregated Analysis. Business and Economics Journal.
[3]	Akpan, N.I. (2005). Government Expenditure and Economic Growth in Nigeria: A Disaggregated Approach. CBN Economic and Financial Review. 43(1).
[4]	Al-Yousif, Y. (2000). Does Government Expenditure Inhibit or Promote Economic Growth: Some Empirical Evidence from Saudi Arabia. Indian Economic Journal, 48(2).
[5]	Bakare, A.S. and Olubokun S. (2011). Health Care Expenditure and Economic Growth in Nigeria: An Empirical study. Journal of Emerging Trends in Economics and Management Sciences (JETEMS) 2(2): 83-87 Copy right Scholar link Research Institute Journals, 2011(ISSN; 2141-7024) jetems.scholarlinkresearch.org.
[6]	Barro, R. (1990). Government Spending in a Simple Model of Endogenous Growth. Journal of Political Economy, 98(5):103-125.
[7]	Bose, N., Hague, M.E. and Osborn, D.R. (2007). Public Expenditure and Economic Growth; A Disaggregated Analysis for Developing Countries. The Manchester School, 75-85, 533-556. Boston: McGraw Hill Inc.
[8]	Dada M.A (2013). Composition Effects of Government Expenditure on Private Consumption and Output Growth in Nigeria: A Single Equation Error Correction Modelling. Romania Journal of Fiscal Policy, Vol.4, Issue 2(7), 18-34.
[9]	Damodar N.G (2009) Basic Econometrics, Fourth Edition Pp.705.
[10]	Easterly, W. and Rebelo S. (1993). Fiscal Policy and Economic Growth: An Empirical Investigation. Journal of Monetary Economics, 32: 417-458..
[11]	Gregoriou, A. and Ghosh, S. (2007). The Impact of Government Expenditure on Growth: Empirical Evidence from Heterogeneous Panel. [http://www.brunel.ac.uk/9379/efwps
[12]	Johansen, S. and Juselius, K. (1990). Maximum Likelihood Estimation and Inference on Cointegration with Applications to the Demand for Money, Oxford Bulletin of Economics and Statistics, 52, 169-210.
[13]	Komain, J. and Brahmasrene, T, (2007). The Relationship between Government Expenditures and Economic Growth in Thailand. Journal of Economics & Economic Education Research. [http://findarticles.com/p/articles/mi_qa5529/?taqcontent;co11]
[14]	MacKinnon, J.G. (2010). "Critical Values for Cointegration Tests," Working Papers 1227, Queen's University, Department of Economics.
[15]	Mackinnon, J.G., Haug, A.A. and Michelis, L. (1996). "Numerical Distribution Functions of Likelihood Ratio Tests for Cointegration," G.R.E.Q.A.M. 9609, Universite Aix-Marseille III.
[16]	Maku, O. E. (2009). “Does Government Spending Spur Economic Growth in Nigeria?” MPRA Paper No.17941. http://mpra.ub.uni-muenchen.de/1794/
[17]	Mitchell, J.D. (2005). The Impact of Government Spending on Economic Growth, Backgrounder,1831. [www.heritage.org/research/budget/bg1831.cfm]
[18]	Nijkamp, P. and Poot, J. (2004). Meta-analysis of the Effect of Fiscal Policy on Long-Run Growth. European Journal of Political Economy, 20: 91-124.
[19]	Norman G., Richard K and Ismael S (2014). “Does the Composition of Government Expenditure matter for Long-run GDP levels? A working Paper in public finance, Victoria University of Wellington Newzealand.
[20]	Olugbenga, A.O. and Owoye, O. (2007). Public Expenditure and Economic Growth: New Evidence from OECD Countries.[http://iaes.confex.com/iaes/Rome_67/techprogram/]
[21]	Peter, S. (2003). Government Expenditures Effect on Economic Growth: The Case of Sweden, 1960-2001. A Bachelor Thesis Submitted to the Department of Business Administration and Social Sciences, Lulea University of Technology, Sweden.
[22]	Ranjan, K.D. and Sharma C, (2008). Government Expenditure and Economic Growth: Evidence from India. The ICFAI University Journal of Public Finance, 6(3): 60-69.

Cite This Article

Plain Text BibTeX RIS

APA Style

Olusi Janet, Dada Matthew Abiodun. (2015). Fiscal Variables and Economic Growth in Oil-rich Developing Countries (1981-2013). Journal of World Economic Research, 4(4), 99-108. https://doi.org/10.11648/j.jwer.20150404.12

Copy | Download

ACS Style

Olusi Janet; Dada Matthew Abiodun. Fiscal Variables and Economic Growth in Oil-rich Developing Countries (1981-2013). J. World Econ. Res. 2015, 4(4), 99-108. doi: 10.11648/j.jwer.20150404.12

Copy | Download

AMA Style

Olusi Janet, Dada Matthew Abiodun. Fiscal Variables and Economic Growth in Oil-rich Developing Countries (1981-2013). J World Econ Res. 2015;4(4):99-108. doi: 10.11648/j.jwer.20150404.12

Copy | Download

@article{10.11648/j.jwer.20150404.12,
  author = {Olusi Janet and Dada Matthew Abiodun},
  title = {Fiscal Variables and Economic Growth in Oil-rich Developing Countries (1981-2013)},
  journal = {Journal of World Economic Research},
  volume = {4},
  number = {4},
  pages = {99-108},
  doi = {10.11648/j.jwer.20150404.12},
  url = {https://doi.org/10.11648/j.jwer.20150404.12},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jwer.20150404.12},
  abstract = {This study examined the growth effect of fiscal variable specifically government expenditure in the oil-rich developing countries of Nigeria, Indonesia and Saudi Arabia. The study covered the period 1981 to 2013. The secondary data used for the study were fetched from World Development Indicators (WDIs) 2014 edition and Pen World Tables version 8.1. The variables included in the analysis include GDP, aggregate government expenditure, imports and exports of goods and services all in US dollar. Others include broad money as a percentage of GDP, annual inflation rate, annual growth rate of population and total population. We employed Time Series Econometric techniques of analysis. Long-run equilibrium relationships were found to exist between government expenditure and economic growth in all the three countries. The result also shows that government expenditures have positive and significant effects on economic growth. However, the magnitude of these effects varies across the three countries. This finding therefore called for the support for fiscal space hypothesis in these countries to boost economic growth. We therefore concluded that government expenditure among other variables enhanced economic growth in the oil-rich developing countries of Nigeria, Indonesia and Saudi Arabia during the period under investigation.},
 year = {2015}
}

Copy | Download

TY - JOUR
T1 - Fiscal Variables and Economic Growth in Oil-rich Developing Countries (1981-2013)
AU - Olusi Janet
AU - Dada Matthew Abiodun
Y1 - 2015/08/10
PY - 2015
N1 - https://doi.org/10.11648/j.jwer.20150404.12
DO - 10.11648/j.jwer.20150404.12
T2 - Journal of World Economic Research
JF - Journal of World Economic Research
JO - Journal of World Economic Research
SP - 99
EP - 108
PB - Science Publishing Group
SN - 2328-7748
UR - https://doi.org/10.11648/j.jwer.20150404.12
AB - This study examined the growth effect of fiscal variable specifically government expenditure in the oil-rich developing countries of Nigeria, Indonesia and Saudi Arabia. The study covered the period 1981 to 2013. The secondary data used for the study were fetched from World Development Indicators (WDIs) 2014 edition and Pen World Tables version 8.1. The variables included in the analysis include GDP, aggregate government expenditure, imports and exports of goods and services all in US dollar. Others include broad money as a percentage of GDP, annual inflation rate, annual growth rate of population and total population. We employed Time Series Econometric techniques of analysis. Long-run equilibrium relationships were found to exist between government expenditure and economic growth in all the three countries. The result also shows that government expenditures have positive and significant effects on economic growth. However, the magnitude of these effects varies across the three countries. This finding therefore called for the support for fiscal space hypothesis in these countries to boost economic growth. We therefore concluded that government expenditure among other variables enhanced economic growth in the oil-rich developing countries of Nigeria, Indonesia and Saudi Arabia during the period under investigation.
VL - 4
IS - 4
ER -

Copy | Download

Author Information

Olusi Janet

Department of Economics, Faculty of Social Sciences, Obafemi Awolowo University, Ile-Ife, Nigeria
Dada Matthew Abiodun

Department of Economics, Faculty of Social and Management Sciences, Wellspring University, Benin City, Nigeria

Download PDF

Sections

Plain Text BibTeX RIS

APA Style

Olusi Janet, Dada Matthew Abiodun. (2015). Fiscal Variables and Economic Growth in Oil-rich Developing Countries (1981-2013). Journal of World Economic Research, 4(4), 99-108. https://doi.org/10.11648/j.jwer.20150404.12

Copy | Download

ACS Style

Olusi Janet; Dada Matthew Abiodun. Fiscal Variables and Economic Growth in Oil-rich Developing Countries (1981-2013). J. World Econ. Res. 2015, 4(4), 99-108. doi: 10.11648/j.jwer.20150404.12

Copy | Download

AMA Style

Olusi Janet, Dada Matthew Abiodun. Fiscal Variables and Economic Growth in Oil-rich Developing Countries (1981-2013). J World Econ Res. 2015;4(4):99-108. doi: 10.11648/j.jwer.20150404.12

Copy | Download

@article{10.11648/j.jwer.20150404.12,
  author = {Olusi Janet and Dada Matthew Abiodun},
  title = {Fiscal Variables and Economic Growth in Oil-rich Developing Countries (1981-2013)},
  journal = {Journal of World Economic Research},
  volume = {4},
  number = {4},
  pages = {99-108},
  doi = {10.11648/j.jwer.20150404.12},
  url = {https://doi.org/10.11648/j.jwer.20150404.12},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jwer.20150404.12},
  abstract = {This study examined the growth effect of fiscal variable specifically government expenditure in the oil-rich developing countries of Nigeria, Indonesia and Saudi Arabia. The study covered the period 1981 to 2013. The secondary data used for the study were fetched from World Development Indicators (WDIs) 2014 edition and Pen World Tables version 8.1. The variables included in the analysis include GDP, aggregate government expenditure, imports and exports of goods and services all in US dollar. Others include broad money as a percentage of GDP, annual inflation rate, annual growth rate of population and total population. We employed Time Series Econometric techniques of analysis. Long-run equilibrium relationships were found to exist between government expenditure and economic growth in all the three countries. The result also shows that government expenditures have positive and significant effects on economic growth. However, the magnitude of these effects varies across the three countries. This finding therefore called for the support for fiscal space hypothesis in these countries to boost economic growth. We therefore concluded that government expenditure among other variables enhanced economic growth in the oil-rich developing countries of Nigeria, Indonesia and Saudi Arabia during the period under investigation.},
 year = {2015}
}

Copy | Download