Relationship among Government Revenue, Expenditure and Gross Domestic Product in Nigeria: Generalized Two Stage Principal Component Approach
International Journal of Theoretical and Applied Mathematics
Volume 2, Issue 1, October 2016, Pages: 24-27
Received: Sep. 9, 2016; Accepted: Oct. 8, 2016; Published: Oct. 17, 2016
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Authors
Adewale F. Lukman, Department of Statistics, Ladoke Akintola University of Technology, Ogbomoso, Nigeria
Samuel Binuomote, Department of Statistics, Ladoke Akintola University of Technology, Ogbomoso, Nigeria
Sodiq O. Omosanya, Department of Statistics, Ladoke Akintola University of Technology, Ogbomoso, Nigeria
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Abstract
This study examined the relationship between gross domestic product (GDP) and some selected government revenue/expenditure namely; oil revenue, non-oil revenue, administrative expenditure, economic expenditure, social expenditure and transfer expenditure for the period 1981–2013. The econometric techniques employed in this study include Augmented Dickey-Fuller (ADF) test, Co-integration analysis, Generalized Two-Stage Principal Component analysis (GT-PC). ADF reveals that all the variables in their natural logarithm form are not stationary in their original level but stationary after first difference. Co-integration test shows that the variables are integrated of the same order. The Long run estimates revealed that the model suffers the problem of Autocorrelation and Multicollinearity and this necessitated the use Generalized Two-stage PC1 method to handle the problem jointly. Results revealed that there exists a positive relationship between GDP, government revenue and expenditure.
Keywords
Unit Root Test, Co-integration Test, Generalized Two-Stage Principal Component
To cite this article
Adewale F. Lukman, Samuel Binuomote, Sodiq O. Omosanya, Relationship among Government Revenue, Expenditure and Gross Domestic Product in Nigeria: Generalized Two Stage Principal Component Approach, International Journal of Theoretical and Applied Mathematics. Vol. 2, No. 1, 2016, pp. 24-27. doi: 10.11648/j.ijtam.20160201.14
Copyright
Copyright © 2016 Authors retain the copyright of this article.
This article is an open access article distributed under the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/) which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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