RE-EXAMINING THE VALIDITY OF RESOURCE CURSE HYPOTHESIS IN NIGERIA: THRESHOLD REGRESSION APPROACH
Ahmed Bala, Naim Aliyu and Haruna Abubakar Modibbo
Volume 1 Issue 1
Abstract
This study uses a threshold regression analysis to re-examine the relationship between oil revenue and economic growth as a further test for the validity of resource curse hypothesis in Nigeria, spanning the period of 1981-2020. The data are sourced from World development indicators and CBN statistical bulletin (2020). The finding reveals the existence of inverted U-shape relationship between oil revenue and economic growth with a maximum threshold of 9.56%, after which oil revenue has a negative effect on economic growth. Below the threshold level, oil revenue has a positive effect on economic growth. This result affirms that resource curse hypothesis is valid for Nigeria under the period of investigation. Based on this finding, the study recommends that, economic transformation and diversification strategies should be intensified so as to reduce over reliance on export of volatile crude oil. Keywords: Economic growth, Oil Revenue, Resource Curse, Threshold Regression, Nigeria.
Download Paper