Asymmetric effects of oil revenue on government expenditure: insights from oil‐exporting developing countries

2021 ◽  
Author(s):  
Adewale Samuel Hassan
Keyword(s):  
Developing Countries ◽  
Government Expenditure ◽  
Asymmetric Effects ◽  
Oil Revenue

scholarly journals Effect of Institutional Quality and Wealth from Oil Revenue on Economic Growth in Oil-Exporting Developing Countries

2019 ◽  
Vol 11 (13) ◽  
pp. 3635 ◽  
Author(s):  
Adewale Samuel Hassan ◽  
Daniel Francois Meyer ◽  
Sebastian Kot
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Institutional Quality ◽  
Linear Interaction ◽  
Distributed Lag ◽  
Oil Revenue ◽  
Long Run ◽  
Negative Effect ◽  
Short Run ◽  
Oil Wealth

This article investigates the role of institutional quality in the oil wealth–economic growth nexus for 35 oil-exporting developing countries between 1984 and 2016. To achieve this objective, an empirical model was employed with linear interaction between oil wealth and institutional quality, and estimated by means of panel autoregressive distributed lag (ARDL) with a dynamic fixed effect estimator. From the results, a contingent effect of oil wealth on economic growth, both in the long run and in the short run, was established. Specifically, institutional quality was found to mitigate the negative effect of oil wealth on economic growth in the long run, while in the short run, institutional quality was found to enhance the positive effect of oil wealth on economic growth. Furthermore, the results provide the threshold levels of institutional quality, beyond which oil wealth enhances economic growth, both in the long run and in the short run, for the sampled countries. These results suggest that in order for oil-exporting developing countries to benefit from an increase in oil wealth, they must adopt appropriate policy measures to improve their levels of institutional quality and embed their entire oil wealth-generating mechanism in a sound institutional framework. Also of importance is that governments must ensure sustainable development through the benefits of wealth from oil.

scholarly journals An Empirical Investigation of Oil Revenue and Economic Growth in Nigeria

2016 ◽  
Vol 12 (25) ◽  
pp. 271 ◽  
Author(s):  
Nweze Paul Nweze ◽  
Greg Ekpung Edame
Keyword(s):  
Economic Growth ◽  
Error Correction ◽  
Empirical Investigation ◽  
Manufacturing Sector ◽  
Government Expenditure ◽  
Negative Relationship ◽  
Unit Root Test ◽  
Secondary Data ◽  
Oil Revenue ◽  
Error Correction Mechanism

This empirical study examined oil revenue and economic growth in Nigeria between 1981 to 2014. Secondary data on gross domestic product (GDP), used as a proxy for economic growth; oil revenue (OREV), and government expenditure (GEXP) which represented the explanatory variables were sourced mainly from CBN publications. In the course of empirical investigation, various advanced econometric techniques like Augmented Dickey Fuller Unit Root Test, Johansen Cointegration Test and Error Correction Mechanism (ECM) were employed and the result reveals among others: That all the variables ware all stationary at first difference, meaning that the variables were not integrated of the same order justifying cointegration and error correction mechanism test. The cointegration result indicated that there is long run relationship among the variables with three cointegrating equation(s). The result of the error correction mechanism (ECM) test indicates that all the variables except lag of government expenditure exerted significant impact on economic growth in Nigeria. However, all the variables exhibited their expected sign in the shortrun but exhibited negative relationship with economic growth in the longrun except for government expenditure, which has positive relationship with economic growth both in the longrun and shortrun. The study concluded that Government should use the revenue generated from petroleum to invest in other domestic sectors such as Agriculture and manufacturing sector in order to expand the revenue source of the economy and further increase the revenue base of the economy.

scholarly journals The Effect of Foreign Debt And Taxation on Government Expenditure In Kenya

2021 ◽  
Vol 04 (06) ◽  
Author(s):  
Dr. Angela Mucece Kithinji ◽  
Keyword(s):  
Developing Countries ◽  
Public Expenditure ◽  
Foreign Debt ◽  
Government Expenditure ◽  
Secondary Data ◽  
Joint Effect ◽  
National Bureau ◽  
National Economic ◽  
The Government ◽  
Correlation Statistics

Cases of high levels of public debt have mostly been reported in many developing countries part of which is debt borrowed abroad. Foreign debt is more preferable by many developing countries because it is cheaper to service in terms of interest costs. These countries tax their citizens heavily to raise enough finances to pay foreign debt. It was thus feasible to establish the influence of the foreign debt and taxation on expenditure of the Kenyan government. The study employed a causal research design. The period under study ranged from 2002 to 2017. The study used secondary data which was extracted from the National Bureau of Statistics, and National Economic Surveys which were available at the Government of Kenya website. Correlation statistics were conducted to establish the association between variables. Regression analysis was used to establish the effect of foreign debt and taxation on government expenditure in Kenya. The findings revealed that foreign debt and taxation influences government expenditure individually. However, on the test of the joint effect, only taxation was found to influence public expenditure significantly unlike foreign debts.

Do government expenditure reduce income inequality: evidence from developing and developed countries

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Noor Zahirah Mohd Sidek
Keyword(s):  
Developing Countries ◽  
Income Inequality ◽  
Driving Forces ◽  
Government Expenditure ◽  
Developed Countries ◽  
Policy Implications ◽  
Content Type ◽  
Positive Effects ◽  
The Impact ◽  
Developing And Developed Countries

Purpose This paper aims to re-examine the impact of government expenditure on income inequality. Existing studies provide mixed results on whether government expenditure reduces or increases income inequality. In this paper, government expenditure is viewed as a tool for redistribution, hence, its impact on inequality is examined. Design/methodology/approach A sample of 122 countries with 91 and 31 countries categorized as developing and developed countries is used. The dynamic panel threshold regression is used to examine the impact of government expenditure on income inequality and to estimate the turning point of the negative or positive effects. Findings The major findings suggest that, in general, government expenditure does reduce income inequality. Results from developed countries support the inversed U-shaped Kuznet curve where higher government expenditure initially led to more inequality but would eventually bring about a positive effect after a certain threshold level. For developing countries, education and development expenditure were the driving forces towards lower income inequality. Practical implications Several policy implications can be derived from this paper. First, government expenditure is a useful tool to alleviate the problem of income inequality. More integration with the global economy via trading activities is also an important channel to help reduce income inequality. Finally, better institutional quality provides an effective ecosystem in promoting better redistribution of income via government expenditure. Originality/value This paper presents a maiden attempt to estimate a threshold value or when government expenditure starts to reduce or increase income inequality. The sample is segregated into developed and developing countries to further control the effect of government size and the level of development of a country.

scholarly journals FDI ON ECONOMICS GROWTH; INDONESIA CASE STUDY

2018 ◽  
pp. 177
Author(s):  
Samsul Haris ◽  
Nevi Danila
Keyword(s):  
Developing Countries ◽  
Economic Policy ◽  
Human Resources ◽  
Government Expenditure ◽  
Font Size ◽  
Independent Variables ◽  
Taxation Policy ◽  
The Impact ◽  
Labor Skills

<p class="western" style="margin-bottom: 0in; font-weight: normal; line-height: 100%;" lang="id-ID" align="justify"><span style="font-family: Times\ New\ Roman, serif;"><span style="font-size: medium;">FDI is one of the factors that encourage the growth of the economy, especially for developing countries. Indonesia has prepared an economic policy package and a taxation policy for booting the investments, including FDI. This paper investigates whether the FDI is one of the essential instruments to improve the growth of Indonesia economy. Multiple regression with GDP as a dependent variable; and FDI, Trade, Government Expenditure, and Inflation as independent variables are employed. The data is from 1985 up to 2015 period. FDI does not have any impact on GDP, while others variables influence the growth of the economy. It suggests that the goals of FDI, namely technology transfer, development of human resources, are not achieved entirely. It implies that the package of economic policy and taxation are not enough for FDI to have the impact on GDP, but others factors, such as wage rate, labor skills, transport and infrastructure, and property rights, must be developed.</span></span></p><p class="western" style="margin-bottom: 0in; line-height: 100%;" align="justify"> </p>

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