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The impact of fiscal policy instruments on investment in Nigeria

 Department: Economics  
 By: usericon Divinefavour  

 Project ID: 3304
   Rating:  (3.2) votes: 11
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   Price:₦3000
Abstract
This study is set out to assess the impact of fiscal policy instruments on investment in Nigeria. With this objective, Econometric techniques such as ADF unit tests, Co-integration tests and error correction techniques were used. The variables were tested for stationarity test and were found to be stationary at first difference. The findings from the study reveal that Government capital expenditure has a negative impact on GFCF in Nigeria. This implies that 1% increase in (GCE) will decrease GFCF by 0.6755percentage point. This does not conform to apriori expectation. This finding was in contrast with the finding of Adefesoet, A (2010) that government expenditure has a positive effect on domestic investment. The coefficient of GRE shows that it has a positive impact on GFCF in Nigeria. This implies that a 1% increase in (GRE) will increase GFCF by 1.8965percentage point. This conforms to apriori expectation. This finding was in line with the finding of Adefesoet, A (2010) that government expenditure has a positive effect on domestic investment. Tax revenue leads to 14.902 increases in GFCF. This implies that tax revenue has a positive effect on GFCF because an increase in taxation according to Keynes will lead to an increase in investment for the period under review. The study also recommends that Government should increase total federal collected revenue (taxes) and investment as an increase in total federal collected revenue (taxes) and investment will lead to a significant positive increase in growth and also increase capital expenditure because it is not significant in explaining growth and investment of Nigerian economy and it has an inverse relationship with growth. ...
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