Authors :
YAQOOB, J; ALIU, I. A.; BAANU, O. B.; ADENIYI, A. O.; AJAYI, A. S.; ADISA, A. M.; ABDULLAHI, I. B
Volume/Issue :
Volume 7 - 2022, Issue 11 - November
Google Scholar :
https://bit.ly/3IIfn9N
Scribd :
https://bit.ly/3hNZWFs
DOI :
https://doi.org/10.5281/zenodo.7478824
Abstract :
The goal of national budget to impact on the
economy, create conducive business climate and to
achieve various types of economic, social and regulatory
objectives remains an illusion in the light of rising general
price level and unemployment rate. This study
investigated the nexus between fiscal policy and
productivity of firms in Nigeria. Time series data covering
a period 1981-2019 were sourced from the CBN Statistical
Bulletin on relevant variables. Pre-analysis tests of unit
roots and co-integration were conducted. Post estimation
test (CUSUM) indicated that the model does not suffer
from serial correlation or heteroscedasticity; the residuals
are normally distributed and the model is structurally
stable. All the post estimation tests’ results suggest that
the short-run and long-run estimates from the estimated
Autoregressive Distributed Lag useful for forecasting and
disentangle long-run relationship from short-run
dynamics model are valid and reliable. The estimated
long-run equation shows that Government Capital
Expenditure (GCE) and Government Recurrent
Expenditure (GRE) have positive significant impacts on
firms’ productivity (FTO) in Nigeria while Non-oil
Revenue (NOR) exerts negative significant impact on
FTO. However, Public Debt (PD) was found to have
positive but insignificant impact on FTO. Hence, the
study recommended that government should focus on
investing on infrastructures and consider a friendly tax
regimes with a view to enhancing firms’ productivity and
employments.
Keywords :
Fiscal Policy; Government Expenditure; Autoregressive Distributed Lag (ARDL); Firms’ productivity JEL Classification: C22; EC62; H50, H60; O11.
The goal of national budget to impact on the
economy, create conducive business climate and to
achieve various types of economic, social and regulatory
objectives remains an illusion in the light of rising general
price level and unemployment rate. This study
investigated the nexus between fiscal policy and
productivity of firms in Nigeria. Time series data covering
a period 1981-2019 were sourced from the CBN Statistical
Bulletin on relevant variables. Pre-analysis tests of unit
roots and co-integration were conducted. Post estimation
test (CUSUM) indicated that the model does not suffer
from serial correlation or heteroscedasticity; the residuals
are normally distributed and the model is structurally
stable. All the post estimation tests’ results suggest that
the short-run and long-run estimates from the estimated
Autoregressive Distributed Lag useful for forecasting and
disentangle long-run relationship from short-run
dynamics model are valid and reliable. The estimated
long-run equation shows that Government Capital
Expenditure (GCE) and Government Recurrent
Expenditure (GRE) have positive significant impacts on
firms’ productivity (FTO) in Nigeria while Non-oil
Revenue (NOR) exerts negative significant impact on
FTO. However, Public Debt (PD) was found to have
positive but insignificant impact on FTO. Hence, the
study recommended that government should focus on
investing on infrastructures and consider a friendly tax
regimes with a view to enhancing firms’ productivity and
employments.
Keywords :
Fiscal Policy; Government Expenditure; Autoregressive Distributed Lag (ARDL); Firms’ productivity JEL Classification: C22; EC62; H50, H60; O11.
