Testing the Applicability of Wagner’s Law in Nigeria

Anoke, Charity Ifeyinwa and Odo, Stephen Idenyi and Chukwu, Bishop Chibuzor and Agbi, Promise E. (2016) Testing the Applicability of Wagner’s Law in Nigeria. Journal of Research in Business and Management, 4 (6). pp. 33-45. ISSN 2347-3002

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Abstract

This study examined the validity or otherwise of Wagner’s theory in Nigeria from 1980- 2015, using time series data on RGDP, TGEX, DINV and HMC. The co integration, VECM and pair wise granger causality econometric tools of analysis were adopted in testing the variables specified in the model. The results obtained from the estimations indicated a long run equilibrium relationship between the dependent and independent variables. TGEX was found to have a negative significant relationship with economic growth both in the short and long run, while DINV maintained positive significant relationship with the dependent variable both in the short and long run. HMC has a positive significant relationship in the short run and insignificant relationship in the long run. The causality test which determines the validity of Wagner’s law showed bidirectional causality from national income (RGDP) to government expenditure (TGEX) and vice visa, invalidating the applicability of this hypothesis in Nigeria within the study period. The study therefore recommend the adoption of discretionary fiscal policy in Nigeria that will accommodate a conscious management of public spending and increase in national income simultaneously, through budget discipline and improvement in the ease of doing business in Nigeria to stimulate capital investment.

Item Type:	Article
Subjects:	H Social Sciences > H Social Sciences (General)
Divisions:	Faculty of Management and Social Sciences
Depositing User:	mrs chioma hannah
Date Deposited:	28 May 2019 13:33
Last Modified:	28 May 2019 13:33
URI:	http://eprints.gouni.edu.ng/id/eprint/1595

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