Investigating the determinants of load capacity factor in Nigeria: An asymmetric quantile approach on urbanization, economic growth, FDI, and resource dependency

Abstract

Nigeria's pursuit of economic growth has raised concerns about its environmental sustainability, particularly regarding the effects of resource dependency, urbanization, and foreign direct investment (FDI). This study employs wavelet quantile regression (WQR) to examine how these factors influence Nigeria's load capacity factor from 1970 to 2022. Findings reveal that economic growth consistently degrades environmental quality across all quantiles, with worsening effects over time. FDI and urbanization similarly exert negative ecological impacts, particularly at medium and high quantiles. Resource dependency harms environmental quality at lower and higher quantiles but shows no effect at mid-levels. Wavelet quantile Granger causality (WQGC) confirms strong short- and medium-term causal relationships. These insights highlight the environmental costs of economic expansion and guide policymakers striving to balance development with sustainability.