Ojo, A E; Ammasoma, D and Adelakun, J O (2023) Responsiveness of the construction sector to fiscal policy in Nigeria. Journal of Construction in Developing Countries, 28(2), pp. 121-137. ISSN 1823-6499
Abstract
The influence of fiscal policy measures on the economy is reflective of sectorial outputs like the construction sector industry. However, the extent of the influence in countries such as Nigeria is vague, making their interaction a concern. This study investigated and examined the relationship between the construction sector and selected fiscal policy measures, namely government revenue, public capital expenditure, gross fixed capital formation and deficit finance. Using time series, data of the study variables between 1980 and 2019 were analysed using cointegration estimation and pairwise casualty techniques. The study’s findings showed that there were long-term and short-term relationships between all variables, but they were not significant, except for the government revenue. Similarly, the pairwise Granger causality test confirmed that deficit financing and public capital expenditure had no casualty effect on the construction sector. It is concluded that the construction sector is not responsive to changes in fiscal policies in Nigeria. Subsequently, the study recommends the need for increased public and private capital investment, improvement in revenue generation and efficient use of debt revenue on infrastructure development to strengthen domestic growth across economic sectors.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | construction sector; debt finance; Nigeria; national economy; fiscal policy; time series |
| Index terms: | national economy, fiscal policy, debt finance, interaction, estimation, Nigeria, capital expenditure, financing, construction sector, capital investment, cointegration, time series, Granger causality test, revenue, infrastructure development |
| Subjects: | economic analysis, financial and cost management, data science, public policy, behavioral psychology, industry analysis, infrastructure engineering, financial risk, Geography, factor and component analysis |
| Topics: | Geographical Context, Research Practice, Engineering Principles, Cost Management, Business Strategy, Governance |
| Descriptive scope: | 4 PCTA |
N.B. Descriptive scope is a count of how many of the five facets of empirical research are indicated by the words used in title, abstract and keywords. It is not intended as a judgement on the research; merely a count of the kind of word we would expect to indicate Phenomenon, Concepts, Theoretical framing, Empirical techniques, Analytical techniques. If all five are present, then a code of “5 PCTEA” will indicate this. If you feel the coding for this record is questionable, we welcome discussion around the terms we matched or the way we categorized them. The facet you would expect may not be coded, or a facet may be coded inappropriately. This can also bear on a larger question, of which facets should be treated as defining in construction management research. Please get in touch, and we will look at it. More details here