Re-examining corruption and economic growth nexus in oil dependent economy: Nigeria’s case
| DOI | https://doi.org/10.1108/JMLC-06-2021-0057 |
| Published date | 22 July 2021 |
| Date | 22 July 2021 |
| Pages | 526-539 |
| Subject Matter | Accounting & finance,Financial risk/company failure,Financial compliance/regulation,Financial crime |
| Author | Mathew Ekundayo Rotimi,Ojo Joseph IseOlorunkanmi,Gift Grace Rotimi,Mishelle Doorasamy |
Re-examining corruption and
economic growth nexus in oil
dependent economy: Nigeria’scase
Mathew Ekundayo Rotimi
Department of Economics, Faculty of Social Science, Federal University Lokoja,
Lokoja, Nigeria
Ojo Joseph IseOlorunkanmi
Department of Political Science and International Relations, Landmark University,
Omu Aran, Nigeria
Gift Grace Rotimi
Department of Business Administration, Kogi State University, Anyigba, Nigeria, and
Mishelle Doorasamy
Department of Accounting, University of KwaZulu-Natal, Durban, South Africa
Abstract
Purpose –The purpose of this study is to empirically examinehow corruption impacts economic output
growth in Nigeria.This is because of the recent trend in the level of corruption.
Design/methodology/approach –Using time seriesdata ranging from 1995 to 2019, this study used the
Johansen cointegration estimating approach and vector error correction mechanism to show an equilibrium
relationship between output growth and other variables (oil revenue and corruption). To conduct the
integrationtest, this study in the preliminary, usedunit root test.
Findings –This study finds unidirectional and bidirectional causal relationships among variables.
Contrary to a few studies, this study shows an equilibrium relationship between output growth and other
variables (oil revenue and corruption). Thus, an increase in corruption at equilibrium would weaken output
growth. Nonetheless, this study finds a gradual return of the deviation from the long-run stability over an
arrangement of imperfect short-run adjustments. Based on the findings, to enhance economic growth, this
study recommends zero tolerance for corruption. It also recommends that governments should further
strengthen anti-corruption institutions and incorporate anti-corruption movements into decision-making
processes.
Originality/value –This study adds to the literature by re-examiningfor the first time the relationship
between corruption and economic growth in Nigeria. This study also deals with some econometrics issues
which arefound to be appropriate estimation to determinethe equilibrium and stability in thisstudy.
Keywords Nigeria, Granger causality, Corruption, Output growth, Oil revenue
Paper type Research paper
1. Introduction
Although several anti-corruption measures have been used, yet, Nigeria remains rooted at
the top of the global corruption ranking and the need to understand the nexus between
corruption index and economic growth remains equivocal. Studies like Bakare (2011) and
Abiodum (2011) show that corruption affects economic growth negatively. Furthermore,
Akinpelu et al. (2013) have shown a long-run relationship between corruption and the
JMLC
25,3
526
Journalof Money Laundering
Control
Vol.25 No. 3, 2022
pp. 526-539
© Emerald Publishing Limited
1368-5201
DOI 10.1108/JMLC-06-2021-0057
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