{"title":"Domestic debt, public spending and economic growth in Nigeria: a mediation analysis","authors":"Nnachi Egwu Onuoha","doi":"10.1108/ajems-10-2023-0400","DOIUrl":null,"url":null,"abstract":"<h3>Purpose</h3>\n<p>This study is aimed at interrogating the mediation role of public spending in domestic debt and economic growth nexus, drawing on debt overhang theory and the Keynesian view.</p><!--/ Abstract__block -->\n<h3>Design/methodology/approach</h3>\n<p>The study deployed a time series data (from 1981 to 2020) set drawn from the 2021 Central Bank of Nigeria (CBN) statistical bulletin. The mediation effect of public spending was tested by performing structural equation modeling after pre-estimation Augmented Dickey-Fuller unit root test.</p><!--/ Abstract__block -->\n<h3>Findings</h3>\n<p>Overall, the study outcomes indicate that domestic debt and public spending have significant positive effects on economic growth. Additionally, the study finds public spending to partially mediate domestic debt and economic growth nexus.</p><!--/ Abstract__block -->\n<h3>Practical implications</h3>\n<p>This study's outcomes provide insights that will enable fiscal policymakers to focus on internal borrowing, keep it under strict control to avert crowding out effects and improve public spending on productive projects to stimulate economic growth.</p><!--/ Abstract__block -->\n<h3>Originality/value</h3>\n<p>As the first study to question the mediation effect of public spending in domestic debt-economic growth relationship, it deepens and extends extant literature on domestic debt-economic growth nexus.</p><!--/ Abstract__block -->","PeriodicalId":46031,"journal":{"name":"African Journal of Economic and Management Studies","volume":"2 1","pages":""},"PeriodicalIF":1.4000,"publicationDate":"2024-07-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"African Journal of Economic and Management Studies","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.1108/ajems-10-2023-0400","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q3","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 0
Abstract
Purpose
This study is aimed at interrogating the mediation role of public spending in domestic debt and economic growth nexus, drawing on debt overhang theory and the Keynesian view.
Design/methodology/approach
The study deployed a time series data (from 1981 to 2020) set drawn from the 2021 Central Bank of Nigeria (CBN) statistical bulletin. The mediation effect of public spending was tested by performing structural equation modeling after pre-estimation Augmented Dickey-Fuller unit root test.
Findings
Overall, the study outcomes indicate that domestic debt and public spending have significant positive effects on economic growth. Additionally, the study finds public spending to partially mediate domestic debt and economic growth nexus.
Practical implications
This study's outcomes provide insights that will enable fiscal policymakers to focus on internal borrowing, keep it under strict control to avert crowding out effects and improve public spending on productive projects to stimulate economic growth.
Originality/value
As the first study to question the mediation effect of public spending in domestic debt-economic growth relationship, it deepens and extends extant literature on domestic debt-economic growth nexus.
期刊介绍:
African Journal of Economic and Management Studies (AJEMS) advances both theoretical and empirical research, informs policies and practices, and improves understanding of how economic and business decisions shape the lives of Africans. AJEMS is a multidisciplinary journal and welcomes papers from all the major disciplines in economics, business and management studies.