Corruption and economic growth in Nigeria: dynamic causality and asymmetric relationships

• Published in: Journal of financial crime 2024-10, Vol.31 (4), p.922-937
• Main Author: Danlami, Ibrahim Abdulhamid
• Format: Article
• Language: English
• Subjects: Borrowing; Causality; Corruption; Deficit financing; Developing countries; Economic development; Economic growth; Expenditures; Fixed exchange rates; GDP; Government revenue; Government spending; Gross Domestic Product; Growth models; Hypotheses; LDCs; Longitudinal studies; Price elasticity; Variables; Wage & price controls
• ISSN: 1359-0790; 1359-0790; 1758-7239
• DOI: 10.1108/JFC-05-2023-0122

Purpose This study aims to intend to investigate the dynamic causality and asymmetric relationships between corruption and economic growth of Nigeria. Design/methodology/approach Toda–Yamamoto (TY) Dynamic Causality Test and Non-linear Autoregressive Distributed Lag Model (NARDL) were used for the estimations, for the period 1984–2018. Findings The result reveals the existence of bidirectional causality between control of corruption and economic growth, Similarly, in both the short run and long run, corruption can affect economic growth and economic growth can as well affects corruption. Research limitations/implications Findings of the research are limited to Nigeria whose data were used, based on TY causality test and NARDL as the econometrics techniques applied, for a period 1984–2018. Practical implications For a meaningful progress to be recorded in Nigeria in terms of economic growth, the country must device some means for strengthen the control of corruption. Originality/value The study was able to prove empirically, the existence of not only causality between corruption and economic growth but also asymmetric effect of corruption on economic growth and that of economic growth on corruption in both the long run and short run, as against the previous studies that are lopsided on the effect of corruption on economic growth only.