Does Governance Matter in the Nexus Between Cross-border Capital Inflows and Economic Performance?
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摘要
This study aims to examine the interactive effect of governance and cross-border capital inflows on economic performance in Nigeria, where there is a dearth of empirical evidence on how governance moderates the effect of various forms of capital inflows on the economy. The study employs the longitudinal research design to analyse the roles of governance in the impact of various forms of cross-border capital inflows on economic performance. The pre-estimation tests for stationarity confirmed the adoption of the Autoregressive Distributed Lag (ARDL) estimator, which simultaneously analyses short-run and long-run impacts. Independently, governance and remittances bear a negative impact on economic performance, while FDI is growth-enhancing with a positive influence. Also, the interactive effect of governance on remittances-economic performance nexus (coeff. = 0.0631; t-value = 0.1766; p-values>0.05) and (coeff. = 1.1464**; t-value = 2.1659; p-values<0.05) for the interactive effect of governance on foreign direct investment-economic performance relation implies that governance variable matters for FDI to impact economic performance. However, governance is an insignificant consideration for remittances to influence economic performance. Nigeria needs to strengthen its institutions so that remittances are tracked and committed to the purposes for which it is remitted and ensure that FDI is invested in real productive sectors that could become the new growth engine. This study elicits findings that depart from earlier studies by using the ARDL estimator to analyse the interactive effect of governance on remittances and foreign direct investment (measures of cross-border capital inflows) for Nigeria.
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