Relationship among Government Revenue, Expenditure and Gross Domestic Product in Nigeria: Generalized Two Stage Principal Component Approach

Adewale F. Lukman; Samuel Binuomote; Sodiq O. Omosanya

doi:doi:10.11648/j.ijtam.20160201.14

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Relationship among Government Revenue, Expenditure and Gross Domestic Product in Nigeria: Generalized Two Stage Principal Component Approach

Adewale F. Lukman, Samuel Binuomote, Sodiq O. Omosanya

Published in International Journal of Theoretical and Applied Mathematics (Volume 2, Issue 1)

Received: 9 September 2016 Accepted: 8 October 2016 Published: 17 October 2016

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Abstract

This study examined the relationship between gross domestic product (GDP) and some selected government revenue/expenditure namely; oil revenue, non-oil revenue, administrative expenditure, economic expenditure, social expenditure and transfer expenditure for the period 1981–2013. The econometric techniques employed in this study include Augmented Dickey-Fuller (ADF) test, Co-integration analysis, Generalized Two-Stage Principal Component analysis (GT-PC). ADF reveals that all the variables in their natural logarithm form are not stationary in their original level but stationary after first difference. Co-integration test shows that the variables are integrated of the same order. The Long run estimates revealed that the model suffers the problem of Autocorrelation and Multicollinearity and this necessitated the use Generalized Two-stage PC1 method to handle the problem jointly. Results revealed that there exists a positive relationship between GDP, government revenue and expenditure.

Published in	International Journal of Theoretical and Applied Mathematics (Volume 2, Issue 1)
DOI	10.11648/j.ijtam.20160201.14
Page(s)	24-27
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

Unit Root Test, Co-integration Test, Generalized Two-Stage Principal Component

References

[1]	Abu, N. and Abdullahi, U. (2010). Government Expenditure and Economic Growth in Nigeria, 1970-2008: A Disaggregated Analysis. Business and Economics Journal, ol. 4, 2-10.
[2]	Ayinde, K., Lukman, A. F. and Arowolo, O. T. (2015). Combined parameters estimation methods of linear regression model with multicollinearity and autocorrelation. Journal of Asian Scientific Research, 5(5), 243-250.
[3]	Barro, R. (1990): "Government Spending in a Simple Model of Endogenous Growth".
[4]	Journal of Political Economy, Vol. 98, S103-S107.
[5]	Engle, R. F. and C. W. Granger, 1987. Co-integration and error correction: Representation, estimation and testing. Econometrica, 55(2): 251-276.
[6]	Friedman, M. (1978): The Limitations of Tax Limitation. Policy Review, summer, 7-14.
[7]	Keynes, J. M. (1936) General Theory of Employment, Interest and Money, London: Macmillan.
[8]	Louis, N. S. (2012), Government Expenditure and Economic Growth in Nigeria: An empirical investigation. Journal of Economic Analysis, Volume III, Issue I, pp 8-51.
[9]	Mansour, G., Fereydoon, A. and Reza, J. (2012). Relationship between oil revenues and government expenditure using wavelet analysis method: Evidence from Iran. Economics and Finance Review, 2(5), 52–61.
[10]	Omo Aregbeyen and Taofik Mohammed (2012). Testing the Revenue and Expenditure Nexus in Nigeria: An Application of the Bound Test Approach, European Journal of Social Sciences, 27(3), 374-380.
[11]	Onakoya, A. B., Tella S. A. and Osoba, A. M. (2012). Investment in infrastructure and Nigerian economic growth. British Journal of Economics, Management & Trade 2(4): 309-326.
[12]	Peacock, A. and J. Wiseman (1979): Approaches to the Analysis of Government Expenditures Growth. Public Finance Quarterly, 3-23.
[13]	Wagner, A., (1883), Three Extracts on Public Finance. Translated and reprinted in Musgrave R. A and Peacock A. T. (Eds), Classics in the Theory of Public Finance, London: Macmillan.

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APA Style

Adewale F. Lukman, Samuel Binuomote, Sodiq O. Omosanya. (2016). Relationship among Government Revenue, Expenditure and Gross Domestic Product in Nigeria: Generalized Two Stage Principal Component Approach. International Journal of Theoretical and Applied Mathematics, 2(1), 24-27. https://doi.org/10.11648/j.ijtam.20160201.14

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ACS Style

Adewale F. Lukman; Samuel Binuomote; Sodiq O. Omosanya. Relationship among Government Revenue, Expenditure and Gross Domestic Product in Nigeria: Generalized Two Stage Principal Component Approach. Int. J. Theor. Appl. Math. 2016, 2(1), 24-27. doi: 10.11648/j.ijtam.20160201.14

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AMA Style

Adewale F. Lukman, Samuel Binuomote, Sodiq O. Omosanya. Relationship among Government Revenue, Expenditure and Gross Domestic Product in Nigeria: Generalized Two Stage Principal Component Approach. Int J Theor Appl Math. 2016;2(1):24-27. doi: 10.11648/j.ijtam.20160201.14

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@article{10.11648/j.ijtam.20160201.14,
  author = {Adewale F. Lukman and Samuel Binuomote and Sodiq O. Omosanya},
  title = {Relationship among Government Revenue, Expenditure and Gross Domestic Product in Nigeria: Generalized Two Stage Principal Component Approach},
  journal = {International Journal of Theoretical and Applied Mathematics},
  volume = {2},
  number = {1},
  pages = {24-27},
  doi = {10.11648/j.ijtam.20160201.14},
  url = {https://doi.org/10.11648/j.ijtam.20160201.14},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijtam.20160201.14},
  abstract = {This study examined the relationship between gross domestic product (GDP) and some selected government revenue/expenditure namely; oil revenue, non-oil revenue, administrative expenditure, economic expenditure, social expenditure and transfer expenditure for the period 1981–2013. The econometric techniques employed in this study include Augmented Dickey-Fuller (ADF) test, Co-integration analysis, Generalized Two-Stage Principal Component analysis (GT-PC). ADF reveals that all the variables in their natural logarithm form are not stationary in their original level but stationary after first difference. Co-integration test shows that the variables are integrated of the same order. The Long run estimates revealed that the model suffers the problem of Autocorrelation and Multicollinearity and this necessitated the use Generalized Two-stage PC1 method to handle the problem jointly. Results revealed that there exists a positive relationship between GDP, government revenue and expenditure.},
 year = {2016}
}

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TY  - JOUR
T1  - Relationship among Government Revenue, Expenditure and Gross Domestic Product in Nigeria: Generalized Two Stage Principal Component Approach
AU  - Adewale F. Lukman
AU  - Samuel Binuomote
AU  - Sodiq O. Omosanya
Y1  - 2016/10/17
PY  - 2016
N1  - https://doi.org/10.11648/j.ijtam.20160201.14
DO  - 10.11648/j.ijtam.20160201.14
T2  - International Journal of Theoretical and Applied Mathematics
JF  - International Journal of Theoretical and Applied Mathematics
JO  - International Journal of Theoretical and Applied Mathematics
SP  - 24
EP  - 27
PB  - Science Publishing Group
SN  - 2575-5080
UR  - https://doi.org/10.11648/j.ijtam.20160201.14
AB  - This study examined the relationship between gross domestic product (GDP) and some selected government revenue/expenditure namely; oil revenue, non-oil revenue, administrative expenditure, economic expenditure, social expenditure and transfer expenditure for the period 1981–2013. The econometric techniques employed in this study include Augmented Dickey-Fuller (ADF) test, Co-integration analysis, Generalized Two-Stage Principal Component analysis (GT-PC). ADF reveals that all the variables in their natural logarithm form are not stationary in their original level but stationary after first difference. Co-integration test shows that the variables are integrated of the same order. The Long run estimates revealed that the model suffers the problem of Autocorrelation and Multicollinearity and this necessitated the use Generalized Two-stage PC1 method to handle the problem jointly. Results revealed that there exists a positive relationship between GDP, government revenue and expenditure.
VL  - 2
IS  - 1
ER  -

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Author Information

Adewale F. Lukman

Department of Statistics, Ladoke Akintola University of Technology, Ogbomoso, Nigeria
Samuel Binuomote

Department of Statistics, Ladoke Akintola University of Technology, Ogbomoso, Nigeria
Sodiq O. Omosanya

Department of Statistics, Ladoke Akintola University of Technology, Ogbomoso, Nigeria

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Plain Text BibTeX RIS

APA Style

Adewale F. Lukman, Samuel Binuomote, Sodiq O. Omosanya. (2016). Relationship among Government Revenue, Expenditure and Gross Domestic Product in Nigeria: Generalized Two Stage Principal Component Approach. International Journal of Theoretical and Applied Mathematics, 2(1), 24-27. https://doi.org/10.11648/j.ijtam.20160201.14

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ACS Style

Adewale F. Lukman; Samuel Binuomote; Sodiq O. Omosanya. Relationship among Government Revenue, Expenditure and Gross Domestic Product in Nigeria: Generalized Two Stage Principal Component Approach. Int. J. Theor. Appl. Math. 2016, 2(1), 24-27. doi: 10.11648/j.ijtam.20160201.14

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AMA Style

Adewale F. Lukman, Samuel Binuomote, Sodiq O. Omosanya. Relationship among Government Revenue, Expenditure and Gross Domestic Product in Nigeria: Generalized Two Stage Principal Component Approach. Int J Theor Appl Math. 2016;2(1):24-27. doi: 10.11648/j.ijtam.20160201.14

Copy | Download

@article{10.11648/j.ijtam.20160201.14,
  author = {Adewale F. Lukman and Samuel Binuomote and Sodiq O. Omosanya},
  title = {Relationship among Government Revenue, Expenditure and Gross Domestic Product in Nigeria: Generalized Two Stage Principal Component Approach},
  journal = {International Journal of Theoretical and Applied Mathematics},
  volume = {2},
  number = {1},
  pages = {24-27},
  doi = {10.11648/j.ijtam.20160201.14},
  url = {https://doi.org/10.11648/j.ijtam.20160201.14},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijtam.20160201.14},
  abstract = {This study examined the relationship between gross domestic product (GDP) and some selected government revenue/expenditure namely; oil revenue, non-oil revenue, administrative expenditure, economic expenditure, social expenditure and transfer expenditure for the period 1981–2013. The econometric techniques employed in this study include Augmented Dickey-Fuller (ADF) test, Co-integration analysis, Generalized Two-Stage Principal Component analysis (GT-PC). ADF reveals that all the variables in their natural logarithm form are not stationary in their original level but stationary after first difference. Co-integration test shows that the variables are integrated of the same order. The Long run estimates revealed that the model suffers the problem of Autocorrelation and Multicollinearity and this necessitated the use Generalized Two-stage PC1 method to handle the problem jointly. Results revealed that there exists a positive relationship between GDP, government revenue and expenditure.},
 year = {2016}
}

Copy | Download

TY  - JOUR
T1  - Relationship among Government Revenue, Expenditure and Gross Domestic Product in Nigeria: Generalized Two Stage Principal Component Approach
AU  - Adewale F. Lukman
AU  - Samuel Binuomote
AU  - Sodiq O. Omosanya
Y1  - 2016/10/17
PY  - 2016
N1  - https://doi.org/10.11648/j.ijtam.20160201.14
DO  - 10.11648/j.ijtam.20160201.14
T2  - International Journal of Theoretical and Applied Mathematics
JF  - International Journal of Theoretical and Applied Mathematics
JO  - International Journal of Theoretical and Applied Mathematics
SP  - 24
EP  - 27
PB  - Science Publishing Group
SN  - 2575-5080
UR  - https://doi.org/10.11648/j.ijtam.20160201.14
AB  - This study examined the relationship between gross domestic product (GDP) and some selected government revenue/expenditure namely; oil revenue, non-oil revenue, administrative expenditure, economic expenditure, social expenditure and transfer expenditure for the period 1981–2013. The econometric techniques employed in this study include Augmented Dickey-Fuller (ADF) test, Co-integration analysis, Generalized Two-Stage Principal Component analysis (GT-PC). ADF reveals that all the variables in their natural logarithm form are not stationary in their original level but stationary after first difference. Co-integration test shows that the variables are integrated of the same order. The Long run estimates revealed that the model suffers the problem of Autocorrelation and Multicollinearity and this necessitated the use Generalized Two-stage PC1 method to handle the problem jointly. Results revealed that there exists a positive relationship between GDP, government revenue and expenditure.
VL  - 2
IS  - 1
ER  -

Copy | Download