Abstract
This study examines the relationships between infrastructural development and economic growth in Nigeria using annual time series data spanning from 1981 - 2017. Research variables like Gross Domestic Product (GDP), Agriculture and Natural Resources (ANR), Roads Maintenance and Construction (RMC), Energy Supply (ENS) and Transport and Communication System (TCS) were used for the study. Philips-Perron unit root test (PP), Vector Autoregressive (VAR) estimation technique and Wald Bounds test were employed. The results of the study confirmed that there is positive correlation between infrastructural development and economic growth in the short-run in Nigeria. Based on the research findings, the study recommends that fiscal macroeconomic instruments should be employed to increase government expenditure on infrastructural development in order to achieve the economic developmental goal of the country. Keywords – Infrastructural Development, Economic Growth, Vector Autoregressive, Wald Bounds, Philips-Perron. DOI : 10.7176/JESD/10-24-07 Publication date: December 31 st 2019
Highlights
In under-developed countries, infrastructural development has been an issue of concern to economic growth in every phase, despite the essentiality of infrastructures to life and humanity
Industrialization must be encouraged by the government by making available the needed infrastructures so that tangible economic growth and development can be recorded in Nigeria (Meire, 1976)
The results show that there are significant variations among ANR, Roads Maintenance and Construction (RMC), Energy Supply (ENS), Telecommunication System (TCS) and Gross Domestic Product (GDP) in the shortrun during the observation period
Summary
In under-developed countries, infrastructural development has been an issue of concern to economic growth in every phase, despite the essentiality of infrastructures to life and humanity. The issue of spurious regression that characterized some earlier studies like Ratner (1983), Aschauer (1989) and Munnell (1992) on the relationship between infrastructural development and economic growth due to the neglect of the time series properties is a serious methodological matter to be addressed To bridge this identify gap, it is necessary to verify the unit root property of the series in this study to avoid spurious or. Www.iiste.org nonsense regression (Gujarati and Dawn, 2009) These needs have generated some researchable questions such as: Are there existing trend relationships between infrastructural expenditure and economic growth in Nigeria? As long as adequate infrastructure provision is certain, producers may find it easier to adopt a modern technology leading to social and economic benefits for growth in output
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