SAVINGS, REMITTANCES AND ECONOMIC GROWTH IN NIGERIA: A VAR APPROACH
Resumo
This study uncovers the direction of causality between savings, foreign remittances and economic growth in Nigeria from 1980 to 2017. Using a Vector autoregressive (VAR) approach, it employs Johansen cointegration test and Toda -Yamamoto causality test to analyze the relationship. DF-GLS unit root tests and Augmented Dickey-Fuller (ADF) test is used to verify the presence of unit root. The result indicates that there is a unidirectional causality from savings to economic growth in line with finance-growth theory and bidirectional causality between savings and remittances. The study revealed that even though both savings and remittances are positive and significant to growth, the effect of savings is long-lasting and permanent. Financial institutions should increase its financial inclusion programs and implement policies that would enhance domestic savings. While Government policies that would enhances economic growth through selective financing of industries and SMEs with multiple positive spillovers should be implemented. In addition, receivers of remittances and small domestic savers should be encouraged to establish small income yielding enterprises which will ultimately boost the country’s economic growth, through increased output and employment
Referências
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Aruwa, S. (2001). Financing options for small and medium scale enterprises in Nigeria.
Retrieved from www.google/academia.edu.com
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Azizi, S. (2018). The impacts of workers' remittances on human capital and labour supply in developing countries. Economic Modelling.
Bankole, A. & Fatai, B. (2013). Relationship between savings and economic growth in Nigeria.
The Social Sciences,8(3), 224-230.
Buch, C. & Kuckulenz, A. (2004). Workers' remittances and capital flows to developing countries. Centre for European Economic Research,Discussion Paper No.04-31.
Davidson, R., & Mackinnon, J. (1993). Estimation and inference in Econometrics. New York: Oxford University Press.
Dickey, D. & Fuller, W. (1979). Likelihood ratio statistics for autoregressive time series with a unit root. Econometrica (49), 1057-72.
Elliot, G. Rothenberg, T. & Stock, J. (1996). Efficient tests for an autoregressive unit root.
Econometrica,64.(4), 813-836.
Engel, R., & Granger, C. (1987). Cointegration and Erroe Correction:Representation,Estimation and Testing. Econometrica,55, 251-276.
Engle, R. & Fuller, W. (1979). Distribution of the estimators for Autoregressive time series with a unit root. Journal of the American Association,(74), 427-431.
Fromentin, V. (2017). The long run and short run impacts of remittances on financial development in developing countries.`. The Quarterly Review of Economic and Finance.
Hicks, J. (1969). A Theory of Economic History. Oxford: Clarendon press.
Iheke, O. (2012). The effect of remittances on the Nigerian economy. International Journal of Development and Sustainability,1 (2), 614-621.
Johansen, S. (1995). Likelihood-based Inference in Cointegrated Vector Autoregressive Models.
Oxford: Oxford University Press.
Karagov, K. (2009). Workers' remittances and economic growth:Evidence from Turkey. Journal of Yasar University,4(13), 1891-908.
keynes, J. (1936). The General Theory of Employment,Interest and Money. Cambridge,UK: Macmillan Cambridge University Press.
Krieckhaus, J. (2002). Reconceptualizing the developmental state:Public savings and economic growth. World Development,(30), 1697-1712.
Levine, R. (1997). Financial development and economic growth. Journal of Economic Literature, 688-726.
Lewis, W. (1955). The Theory of Economic Growth. London: Allen and Unwin.
Liang, Q., & Teng, J. (2006). Financial development and economic growth:evidence from China.
China Economic rwview,(174), 395-411.
Lorie, H. (2007). Mobilizing savings for sustainable high growth:Lessons from Asis for Pakistan.
PIDE. Islamabad: www.pide.org.pk/pdf/seminar.
Lucas, R. (1988). On the mechanisms of economic development. Journal of Monetary Economics,22(10), 3-42.
McKinnon, R. (1973). Money and capital in economic development. Brookings Institution Press.
Meyer, D. & Shera, A. (2016). The impact of remittances on economic growth:An econometric model. ECONOMIA.
Ncube, M., & Brixiova, Z. (2013). Remittances and their macroeconomic impact:evidence from Africa. African Development Bank group Working Paper Series No.188.
Nwachukwu, T. & Odigie, P. (2011). What drives private savings in Nigeria. African Economic Research Consortium AERC Research Paper 12.
Odeniran, S. & Udeaja, E. (2010). Financial sector development and economic growth:empirical evidence from Nigeria. CBN,Economic and Financial Review., 91-124.
Odhiambo, N. (2004). Is financial development still a spur to economic growth?A causal evidence from South Africa.. Savings and development,(28), 47-62.
Odhiambo, N. (2008). Financial depth,savings and economic growth in Kenya:A dynamic causal linkage. Economic Modelling (25)704-713
Odhiambo, N. (2009). Savings and economic growth in South Africa:A multivariate causality test. Journal of Policy Modelling (31),708-718
Odionye, J. & Emerole, O. (2015). The impact of international remittances on the nigerian economy. british Journal of Economics,Management & trade,7(1), 1-9.
Ogunwole, O. (2016). Does remittances and output improve household welfare in Nigeria?
Journal of Economics and Sustainable Development,7(3), 44-55.
Okpala, C. (2017). Domestic savings and economic growth in Nigeria(1980-2015). World Applied Sciences Journal 35(6), 848-866.
Okudua, H. (2010). Workers'remittances and economic growth in Selected Sub-Saharan Countries:PhD Thesis. Otta,Ogun state.: Department of Economics and Development Studies,Covenant University.
Oladipo, S. (2009). Does saving really matter for growth in developing countries?the case of a small open country. http;//economics.ca/0619.pdf.
Oshota, S. & Badejo, A. (2014). The impact of remittances on economic growth in Nigeria:an error correction modelling approach. Zagreb International Review of Economics & Business,17(2)25-55.
Pagano, M. (1993). The floatation of companies on the stock market:a coordination failure.
European Economic Review,(37), 1101-25.
Patra, S. Murthy, D., & Babu, K. (2017). Revisiting the causal nexus between savings and economic growth in India:An empirical analysis. ECONOMIA.
PWC. (2017). Nigeria's economic recovery:defining the path for economic growth. PwC publications. Retrieved from www.pwc.com/ng
Ratha, D. (2003). Workers' remittances:An important and stable source of external development finance. Global Development Finance.
Robinson, J. (1952). "The Generalization of the General Theory"in the rate of interest and other essays. London: Macmillan.
Romer, P. (1986). Increasing returns and long-run growth. Journal of Political Economy.October.
Schumpeter, J. (1911). The theory of economic development:an inquiry into profits,capital,credit,interest and the business cycle. Massachusetts: Havard University Press,Cambridge.
Shaw, E. (1973). Financial deepening in economic development. London: Oxford University Press.
Sinha, D., & Sinha, T. (1998). Cart before the Horse?The Saving-growth nexus in Mexico.
Economics Letters,61, 43-47.
Solow, R. (1956). A contribution to the theory of economic growth. The Quarterly Journal of Economics,70(1), 65-94.
Toda, H. & Yamamoto. (1995). Statistical inference in Vector Autoregressions with possibly integrated processes. Journal of Econometrics,(66), 225-250.
Ubi, P. & Essien, M. (2018). Remittances and economic development in Nigeria:A macroeconomic approach. International Journal of Economics,Commerce and Management,Vi(6),105-133
Udechukwu, F. (2003). Survey of small and medium scale industries in Nigeria and their potentials in Nigeria. Central Bank of Nigeria Training Centre. Retrieved from www.cenbank.org
Ujunwa, A. (2014). Home Remittances. Abuja: Central Bank of Nigeria:Understanding Monetary Policy Series,No.38.
World Bank. (2016). Migration and Developemnt. WorldBank Factbook.
World Bank, Brief. (2017). Migration and Remittance. World Bank Migrationa and Development Brief 27,April.
WorldBank. (2006). Trends,Determinants and Macroeconomic Effects of Remittances,Global Economic prospects. Washington: World Bank.
Zang, H., & Kim, Y. (2007). Does financial development precede growth?Robinson and Lucas might be rigth. Applied Economic Letters (14), 15-19.
Agarwal, P. (2001). The relation between savings and growth:cointegration and causality evidence from Asia. Applied Economics,33, 499-513.
Ali, S. (2013). Cointegration analysis of exports and imports:the case of Pakistan. European Journal of Technology and Development,Vol.11.
AOR, R. (2015). Basic Econometric Analysis Using Eviews:Begining Guide. Makurdi-Benue State.Nigeria.: Begha & Gafa Groups Ltd.
Aruwa, S. (2001). Financing options for small and medium scale enterprises in Nigeria.
Retrieved from www.google/academia.edu.com
Asteriou, D., & Hall, S. (2007). Applied Econometrics:A Modern Approach using Eviews and Microfit. New York: Palgrave Publishers Ltd.175 fifth avenue,New York,10010.
Azizi, S. (2018). The impacts of workers' remittances on human capital and labour supply in developing countries. Economic Modelling.
Bankole, A. & Fatai, B. (2013). Relationship between savings and economic growth in Nigeria.
The Social Sciences,8(3), 224-230.
Buch, C. & Kuckulenz, A. (2004). Workers' remittances and capital flows to developing countries. Centre for European Economic Research,Discussion Paper No.04-31.
Davidson, R., & Mackinnon, J. (1993). Estimation and inference in Econometrics. New York: Oxford University Press.
Dickey, D. & Fuller, W. (1979). Likelihood ratio statistics for autoregressive time series with a unit root. Econometrica (49), 1057-72.
Elliot, G. Rothenberg, T. & Stock, J. (1996). Efficient tests for an autoregressive unit root.
Econometrica,64.(4), 813-836.
Engel, R., & Granger, C. (1987). Cointegration and Erroe Correction:Representation,Estimation and Testing. Econometrica,55, 251-276.
Engle, R. & Fuller, W. (1979). Distribution of the estimators for Autoregressive time series with a unit root. Journal of the American Association,(74), 427-431.
Fromentin, V. (2017). The long run and short run impacts of remittances on financial development in developing countries.`. The Quarterly Review of Economic and Finance.
Hicks, J. (1969). A Theory of Economic History. Oxford: Clarendon press.
Iheke, O. (2012). The effect of remittances on the Nigerian economy. International Journal of Development and Sustainability,1 (2), 614-621.
Johansen, S. (1995). Likelihood-based Inference in Cointegrated Vector Autoregressive Models.
Oxford: Oxford University Press.
Karagov, K. (2009). Workers' remittances and economic growth:Evidence from Turkey. Journal of Yasar University,4(13), 1891-908.
keynes, J. (1936). The General Theory of Employment,Interest and Money. Cambridge,UK: Macmillan Cambridge University Press.
Krieckhaus, J. (2002). Reconceptualizing the developmental state:Public savings and economic growth. World Development,(30), 1697-1712.
Levine, R. (1997). Financial development and economic growth. Journal of Economic Literature, 688-726.
Lewis, W. (1955). The Theory of Economic Growth. London: Allen and Unwin.
Liang, Q., & Teng, J. (2006). Financial development and economic growth:evidence from China.
China Economic rwview,(174), 395-411.
Lorie, H. (2007). Mobilizing savings for sustainable high growth:Lessons from Asis for Pakistan.
PIDE. Islamabad: www.pide.org.pk/pdf/seminar.
Lucas, R. (1988). On the mechanisms of economic development. Journal of Monetary Economics,22(10), 3-42.
McKinnon, R. (1973). Money and capital in economic development. Brookings Institution Press.
Meyer, D. & Shera, A. (2016). The impact of remittances on economic growth:An econometric model. ECONOMIA.
Ncube, M., & Brixiova, Z. (2013). Remittances and their macroeconomic impact:evidence from Africa. African Development Bank group Working Paper Series No.188.
Nwachukwu, T. & Odigie, P. (2011). What drives private savings in Nigeria. African Economic Research Consortium AERC Research Paper 12.
Odeniran, S. & Udeaja, E. (2010). Financial sector development and economic growth:empirical evidence from Nigeria. CBN,Economic and Financial Review., 91-124.
Odhiambo, N. (2004). Is financial development still a spur to economic growth?A causal evidence from South Africa.. Savings and development,(28), 47-62.
Odhiambo, N. (2008). Financial depth,savings and economic growth in Kenya:A dynamic causal linkage. Economic Modelling (25)704-713
Odhiambo, N. (2009). Savings and economic growth in South Africa:A multivariate causality test. Journal of Policy Modelling (31),708-718
Odionye, J. & Emerole, O. (2015). The impact of international remittances on the nigerian economy. british Journal of Economics,Management & trade,7(1), 1-9.
Ogunwole, O. (2016). Does remittances and output improve household welfare in Nigeria?
Journal of Economics and Sustainable Development,7(3), 44-55.
Okpala, C. (2017). Domestic savings and economic growth in Nigeria(1980-2015). World Applied Sciences Journal 35(6), 848-866.
Okudua, H. (2010). Workers'remittances and economic growth in Selected Sub-Saharan Countries:PhD Thesis. Otta,Ogun state.: Department of Economics and Development Studies,Covenant University.
Oladipo, S. (2009). Does saving really matter for growth in developing countries?the case of a small open country. http;//economics.ca/0619.pdf.
Oshota, S. & Badejo, A. (2014). The impact of remittances on economic growth in Nigeria:an error correction modelling approach. Zagreb International Review of Economics & Business,17(2)25-55.
Pagano, M. (1993). The floatation of companies on the stock market:a coordination failure.
European Economic Review,(37), 1101-25.
Patra, S. Murthy, D., & Babu, K. (2017). Revisiting the causal nexus between savings and economic growth in India:An empirical analysis. ECONOMIA.
PWC. (2017). Nigeria's economic recovery:defining the path for economic growth. PwC publications. Retrieved from www.pwc.com/ng
Ratha, D. (2003). Workers' remittances:An important and stable source of external development finance. Global Development Finance.
Robinson, J. (1952). "The Generalization of the General Theory"in the rate of interest and other essays. London: Macmillan.
Romer, P. (1986). Increasing returns and long-run growth. Journal of Political Economy.October.
Schumpeter, J. (1911). The theory of economic development:an inquiry into profits,capital,credit,interest and the business cycle. Massachusetts: Havard University Press,Cambridge.
Shaw, E. (1973). Financial deepening in economic development. London: Oxford University Press.
Sinha, D., & Sinha, T. (1998). Cart before the Horse?The Saving-growth nexus in Mexico.
Economics Letters,61, 43-47.
Solow, R. (1956). A contribution to the theory of economic growth. The Quarterly Journal of Economics,70(1), 65-94.
Toda, H. & Yamamoto. (1995). Statistical inference in Vector Autoregressions with possibly integrated processes. Journal of Econometrics,(66), 225-250.
Ubi, P. & Essien, M. (2018). Remittances and economic development in Nigeria:A macroeconomic approach. International Journal of Economics,Commerce and Management,Vi(6),105-133
Udechukwu, F. (2003). Survey of small and medium scale industries in Nigeria and their potentials in Nigeria. Central Bank of Nigeria Training Centre. Retrieved from www.cenbank.org
Ujunwa, A. (2014). Home Remittances. Abuja: Central Bank of Nigeria:Understanding Monetary Policy Series,No.38.
World Bank. (2016). Migration and Developemnt. WorldBank Factbook.
World Bank, Brief. (2017). Migration and Remittance. World Bank Migrationa and Development Brief 27,April.
WorldBank. (2006). Trends,Determinants and Macroeconomic Effects of Remittances,Global Economic prospects. Washington: World Bank.
Zang, H., & Kim, Y. (2007). Does financial development precede growth?Robinson and Lucas might be rigth. Applied Economic Letters (14), 15-19.
Publicado
2019-07-15
Secção
Articles
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