The Influence of Economic Institutions in the Debt-Growth Nexus: Evidence from Nigeria

Martins Iyoboyi () and Abdullahi Badiru
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Martins Iyoboyi: Federal University Dutsin-Ma
Abdullahi Badiru: Federal University Dutsin-Ma

Open Economies Review, 2025, vol. 36, issue 1, No 6, 177-195

Abstract: Abstract This paper investigates the influence of economic institutions in the debt-growth nexus. Using data from 1970 to 2020 on Nigeria, the paper extends the econometric literature by deploying cointegration techniques that account for structural breaks. A long equilibrium relationship was found among debt, growth, economic institutions and associated variables. The effect of debt on growth was found to be positive up to a threshold of 13.62% and 27.19% of gross domestic product in the short and long-run respectively, beyond which its effect becomes negative and significant. Growth is more sensitive to economic institutions than debt, underscoring the criticality of institutions.

Keywords: Africa; ARDL; Debt; Economic growth; Economic institutions; Structural break (search for similar items in EconPapers)
JEL-codes: C22 E02 H63 O17 O43 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s11079-024-09749-6

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