Long-Term Asymmetric Impact of VAT on Domestic Investment in Nigeria
We employ a non-linear ARDL (NARDL) technique to explore long-term asymmetric influence of value added tax (VAT) on domestic investment using quarterly data for Nigeria from 1994 to 2021. A long-term relation was found between domestic investment and VAT (alongside lending and inflation rates, cred...
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| Format: | Article |
| Language: | English |
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Vilnius University Press
2023-12-01
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| Series: | Organizations and Markets in Emerging Economies |
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| Online Access: | https://www.journals.vu.lt/omee/article/view/32171 |
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| author | Nurudeen Abu Blessing Izuagie Onyewuchi Amaechi Ben-Obi |
| author_facet | Nurudeen Abu Blessing Izuagie Onyewuchi Amaechi Ben-Obi |
| author_sort | Nurudeen Abu |
| collection | DOAJ |
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We employ a non-linear ARDL (NARDL) technique to explore long-term asymmetric influence of value added tax (VAT) on domestic investment using quarterly data for Nigeria from 1994 to 2021. A long-term relation was found between domestic investment and VAT (alongside lending and inflation rates, credit to private sector, exchange rate, openness and households’ consumption expenditure) based on the bounds test to cointegration. We uncovered a long-term asymmetric association between domestic investment and VAT. The results show that a positive shock (an increase) in VAT has a long-term decrease and significant influence on domestic investment, while a negative shock (a decrease) in VAT has an insignificant positive influence on investment during the long-term. Other significant long-term drivers of domestic investment are credit to private sector, inflation and lending rates, openness, exchange rate and households’ consumption expenditure. Some recommendations have been offered based on the empirical outcomes.
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| format | Article |
| id | doaj-art-ae80404a516b43cbb0837ed7aa0cdde1 |
| institution | Kabale University |
| issn | 2029-4581 2345-0037 |
| language | English |
| publishDate | 2023-12-01 |
| publisher | Vilnius University Press |
| record_format | Article |
| series | Organizations and Markets in Emerging Economies |
| spelling | doaj-art-ae80404a516b43cbb0837ed7aa0cdde12025-01-20T18:21:44ZengVilnius University PressOrganizations and Markets in Emerging Economies2029-45812345-00372023-12-0114310.15388/omee.2023.14.9Long-Term Asymmetric Impact of VAT on Domestic Investment in NigeriaNurudeen Abu0Blessing Izuagie1Onyewuchi Amaechi Ben-Obi2Baba-Ahmed University, NigeriaUmaru Musa Yar’adua University, NigeriaCentral Bank of Nigeria We employ a non-linear ARDL (NARDL) technique to explore long-term asymmetric influence of value added tax (VAT) on domestic investment using quarterly data for Nigeria from 1994 to 2021. A long-term relation was found between domestic investment and VAT (alongside lending and inflation rates, credit to private sector, exchange rate, openness and households’ consumption expenditure) based on the bounds test to cointegration. We uncovered a long-term asymmetric association between domestic investment and VAT. The results show that a positive shock (an increase) in VAT has a long-term decrease and significant influence on domestic investment, while a negative shock (a decrease) in VAT has an insignificant positive influence on investment during the long-term. Other significant long-term drivers of domestic investment are credit to private sector, inflation and lending rates, openness, exchange rate and households’ consumption expenditure. Some recommendations have been offered based on the empirical outcomes. https://www.journals.vu.lt/omee/article/view/32171domestic investmentVATnon-linearARDLNigeria |
| spellingShingle | Nurudeen Abu Blessing Izuagie Onyewuchi Amaechi Ben-Obi Long-Term Asymmetric Impact of VAT on Domestic Investment in Nigeria Organizations and Markets in Emerging Economies domestic investment VAT non-linear ARDL Nigeria |
| title | Long-Term Asymmetric Impact of VAT on Domestic Investment in Nigeria |
| title_full | Long-Term Asymmetric Impact of VAT on Domestic Investment in Nigeria |
| title_fullStr | Long-Term Asymmetric Impact of VAT on Domestic Investment in Nigeria |
| title_full_unstemmed | Long-Term Asymmetric Impact of VAT on Domestic Investment in Nigeria |
| title_short | Long-Term Asymmetric Impact of VAT on Domestic Investment in Nigeria |
| title_sort | long term asymmetric impact of vat on domestic investment in nigeria |
| topic | domestic investment VAT non-linear ARDL Nigeria |
| url | https://www.journals.vu.lt/omee/article/view/32171 |
| work_keys_str_mv | AT nurudeenabu longtermasymmetricimpactofvatondomesticinvestmentinnigeria AT blessingizuagie longtermasymmetricimpactofvatondomesticinvestmentinnigeria AT onyewuchiamaechibenobi longtermasymmetricimpactofvatondomesticinvestmentinnigeria |