Title: How important is oil revenue in Nigerian growth process? Evidence from a threshold regression

Authors: James Temitope Dada; Ezekiel Olamide Abanikanda

Addresses: Department of Economics, Obafemi Awolowo University, Ile-Ife, Nigeria ' Department of Economics, Obafemi Awolowo University, Ile-Ife, Nigeria

Abstract: This study examines the effect of oil revenue on Nigerian growth process by focusing on threshold level of oil revenue from 1980-2017. Growth rate of oil revenue and gross domestic product are used as proxy for oil revenue and economic growth index respectively. Data are sourced from Central Bank of Nigeria statistical bulletin and World Development Indicators, 2017 edition. Threshold regression is used as the estimation technique. The threshold level of oil revenue in Nigeria that sustain economic growth is 6.17%. Below the threshold level, oil revenue has positive and significant effect on economic growth. While in the second regime (above the threshold level), oil revenue has negative and significant effect on economic growth in Nigeria which affirms the resource curse hypothesis in Nigeria. The study concludes that proceeds from oil revenue should be effectively utilised and institutions should be strengthened.

Keywords: oil revenue; economic growth; threshold regression; sustainability.

DOI: 10.1504/IJSE.2019.103470

International Journal of Sustainable Economy, 2019 Vol.11 No.4, pp.364 - 377

Received: 12 Feb 2019
Accepted: 10 Apr 2019
Published online: 06 Nov 2019 *

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