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Analyzing the impact of external debt on capital formation in Nigeria: An autoregressive distributed lag approach

This study aimed at examining the impact of external debt to the growth and development of capital formation in Nigeria.Time series data was utilized for a period from 1980 to 2013, employing the Autoregressive Distributed Lag (ARDL) modelling. The result of stationarity tests reported a mixed integ...

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Main Authors: Abdullahi, Muhammad Mustapha, Hassan, Sallahuddin, Abu Bakar, Nor'Aznin
Format: Article
Language:English
Published: MCSER Publishing, Rome-Italy 2016
Subjects:
HJ Public Finance
Online Access:http://repo.uum.edu.my/18230/1/MJSS%207%20%201%202016%20173-183.pdf
http://repo.uum.edu.my/18230/
http://doi.org/10.5901/mjss.2016.v7n1p173
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spelling my.uum.repo.182302016-06-26T08:41:40Z http://repo.uum.edu.my/18230/ Analyzing the impact of external debt on capital formation in Nigeria: An autoregressive distributed lag approach Abdullahi, Muhammad Mustapha Hassan, Sallahuddin Abu Bakar, Nor'Aznin HJ Public Finance This study aimed at examining the impact of external debt to the growth and development of capital formation in Nigeria.Time series data was utilized for a period from 1980 to 2013, employing the Autoregressive Distributed Lag (ARDL) modelling. The result of stationarity tests reported a mixed integration at both I(0) and I(1) hence warranting the use of the ARDL.The ARDL estimation also showed the presence of long run relationship amongst the variables.It was also proved that the variables were independently related in the long run. The impact of external debt on capital formation has been established to be negative and statistically significant while savings came out as the only variable with a bidirectional causal relationship amongst the variables. Interest rate was found to be statistically significant even though weak.The other variables were found to be of unidirectional casual effects. Short-run dynamics of the relationship between the variables have also been examined using ARDL error correction modelling. It was established that the disequilibrium in the previous period will be adjusted within the current period by 68 percent showing a speedy adjustment rate.The coefficient of ECM term has the expected sign and significant at one percent. Going by these findings therefore savings should be giving priority and encouraged internally in order to boost the speed of the growth of capital formation in the economy. MCSER Publishing, Rome-Italy 2016 Article PeerReviewed application/pdf en cc_by http://repo.uum.edu.my/18230/1/MJSS%207%20%201%202016%20173-183.pdf Abdullahi, Muhammad Mustapha and Hassan, Sallahuddin and Abu Bakar, Nor'Aznin (2016) Analyzing the impact of external debt on capital formation in Nigeria: An autoregressive distributed lag approach. Mediterranean Journal of Social Sciences, 7 (1). pp. 173-183. ISSN 2039-9340 http://doi.org/10.5901/mjss.2016.v7n1p173 doi:10.5901/mjss.2016.v7n1p173
institution Universiti Utara Malaysia
building UUM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Utara Malaysia
content_source UUM Institutionali Repository
url_provider http://repo.uum.edu.my/
language English
topic HJ Public Finance
spellingShingle HJ Public Finance
Abdullahi, Muhammad Mustapha
Hassan, Sallahuddin
Abu Bakar, Nor'Aznin
Analyzing the impact of external debt on capital formation in Nigeria: An autoregressive distributed lag approach
description This study aimed at examining the impact of external debt to the growth and development of capital formation in Nigeria.Time series data was utilized for a period from 1980 to 2013, employing the Autoregressive Distributed Lag (ARDL) modelling. The result of stationarity tests reported a mixed integration at both I(0) and I(1) hence warranting the use of the ARDL.The ARDL estimation also showed the presence of long run relationship amongst the variables.It was also proved that the variables were independently related in the long run. The impact of external debt on capital formation has been established to be negative and statistically significant while savings came out as the only variable with a bidirectional causal relationship amongst the variables. Interest rate was found to be statistically significant even though weak.The other variables were found to be of unidirectional casual effects. Short-run dynamics of the relationship between the variables have also been examined using ARDL error correction modelling. It was established that the disequilibrium in the previous period will be adjusted within the current period by 68 percent showing a speedy adjustment rate.The coefficient of ECM term has the expected sign and significant at one percent. Going by these findings therefore savings should be giving priority and encouraged internally in order to boost the speed of the growth of capital formation in the economy.
format Article
author Abdullahi, Muhammad Mustapha
Hassan, Sallahuddin
Abu Bakar, Nor'Aznin
author_facet Abdullahi, Muhammad Mustapha
Hassan, Sallahuddin
Abu Bakar, Nor'Aznin
author_sort Abdullahi, Muhammad Mustapha
title Analyzing the impact of external debt on capital formation in Nigeria: An autoregressive distributed lag approach
title_short Analyzing the impact of external debt on capital formation in Nigeria: An autoregressive distributed lag approach
title_full Analyzing the impact of external debt on capital formation in Nigeria: An autoregressive distributed lag approach
title_fullStr Analyzing the impact of external debt on capital formation in Nigeria: An autoregressive distributed lag approach
title_full_unstemmed Analyzing the impact of external debt on capital formation in Nigeria: An autoregressive distributed lag approach
title_sort analyzing the impact of external debt on capital formation in nigeria: an autoregressive distributed lag approach
publisher MCSER Publishing, Rome-Italy
publishDate 2016
url http://repo.uum.edu.my/18230/1/MJSS%207%20%201%202016%20173-183.pdf
http://repo.uum.edu.my/18230/
http://doi.org/10.5901/mjss.2016.v7n1p173
_version_ 1644282410347528192
score 13.211869

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