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Oil rent, corruption and economic growth relationship in Nigeria: evidence from various estimation techniques

Joseph David (Department of Economics, FPE, Universiti Pendidikan Sultan Idris (UPSI), Tanjung Malim, Malaysia and Centre for Economic Policy and Development Research (CEPDeR), Covenant University, Ota, Nigeria)
Awadh Ahmed Mohammed Gamal (Department of Economics, FPE, Universiti Pendidikan Sultan Idris (UPSI), Tanjung Malim, Malaysia)
Mohd Asri Mohd Noor (Department of Economics, FPE, Universiti Pendidikan Sultan Idris (UPSI), Tanjung Malim, Malaysia)
Zainizam Zakariya (Department of Economics, FPE, Universiti Pendidikan Sultan Idris (UPSI), Tanjung Malim, Malaysia)

Journal of Money Laundering Control

ISSN: 1368-5201

Article publication date: 19 February 2024

Issue publication date: 14 August 2024

130

Abstract

Purpose

Despite the huge financial resources associated with oil, Nigeria has consistently recorded poor growth performance. Therefore, this study aims to examine how corruption and oil rent influence Nigeria’s economic performance during the 1996–2021 period.

Design/methodology/approach

Various estimation techniques were used. These include the bootstrap autoregressive distributed lag (ARDL) bounds-testing, dynamic ordinary least squares (DOLS), the fully modified OLS (FMOLS) and the canonical cointegration regression (CCR) estimators and the Toda–Yamamoto causality.

Findings

The bounds testing results provide evidence of a cointegrating relationship between the variables. In addition, the results of the ARDL, DOLS, CCR and FMOLS estimators demonstrate that oil rent and corruption have a significant positive impact on growth. Further, the results indicate that human capital and financial development enhance economic growth, whereas domestic investment and unemployment rates slow down long-term growth. Additionally, the causality test results illustrate the presence of a one-way causality from oil rent to economic growth and a bi-directional causal relationship between corruption and economic growth.

Originality/value

Existing studies focused on the effects of either oil rent or corruption on growth in Nigeria. Little attention has been paid to the exploration of how the rent from oil and the pervasiveness of corruption contribute to the performance of the Nigerian economy. Based on the outcome of this study, strategies and policies geared towards reducing oil dependence and the pervasiveness of corruption, enhancing human capital and financial development and reducing unemployment are recommended.

Keywords

Acknowledgements

Since submission of this article, the following author has updated their affiliation: Joseph David is no longer associated with Lagos Business School, Pan-Atlantic University, Lagos, Nigeria.

The authors express their gratitude to Sultan Idris Education University (UPSI), Malaysia, for providing financial support for this research.

Citation

David, J., Gamal, A.A.M., Mohd Noor, M.A. and Zakariya, Z. (2024), "Oil rent, corruption and economic growth relationship in Nigeria: evidence from various estimation techniques", Journal of Money Laundering Control, Vol. 27 No. 5, pp. 962-979. https://doi.org/10.1108/JMLC-10-2023-0160

Publisher

:

Emerald Publishing Limited

Copyright © 2024, Emerald Publishing Limited

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