Re-examining corruption and economic growth nexus in oil dependent economy: Nigeria’s case
Journal of Money Laundering Control
ISSN: 1368-5201
Article publication date: 22 July 2021
Issue publication date: 8 June 2022
Abstract
Purpose
The purpose of this study is to empirically examine how corruption impacts economic output growth in Nigeria. This is because of the recent trend in the level of corruption.
Design/methodology/approach
Using time series data ranging from 1995 to 2019, this study used the Johansen cointegration estimating approach and vector error correction mechanism to show an equilibrium relationship between output growth and other variables (oil revenue and corruption). To conduct the integration test, this study in the preliminary, used unit root test.
Findings
This study finds unidirectional and bidirectional causal relationships among variables. Contrary to a few studies, this study shows an equilibrium relationship between output growth and other variables (oil revenue and corruption). Thus, an increase in corruption at equilibrium would weaken output growth. Nonetheless, this study finds a gradual return of the deviation from the long-run stability over an arrangement of imperfect short-run adjustments. Based on the findings, to enhance economic growth, this study recommends zero tolerance for corruption. It also recommends that governments should further strengthen anti-corruption institutions and incorporate anti-corruption movements into decision-making processes.
Originality/value
This study adds to the literature by re-examining for the first time the relationship between corruption and economic growth in Nigeria. This study also deals with some econometrics issues which are found to be appropriate estimation to determine the equilibrium and stability in this study.
Keywords
Citation
Rotimi, M.E., IseOlorunkanmi, O.J., Rotimi, G.G. and Doorasamy, M. (2022), "Re-examining corruption and economic growth nexus in oil dependent economy: Nigeria’s case", Journal of Money Laundering Control, Vol. 25 No. 3, pp. 526-539. https://doi.org/10.1108/JMLC-06-2021-0057
Publisher
:Emerald Publishing Limited
Copyright © 2021, Emerald Publishing Limited