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The Relationship Between Domestic Savings And Investment: The Feldstein-Horioka Test Using Nigerian Data, Inuwa Nasiru, Usman M. Haruna
The Relationship Between Domestic Savings And Investment: The Feldstein-Horioka Test Using Nigerian Data, Inuwa Nasiru, Usman M. Haruna
CBN Journal of Applied Statistics (JAS)
This study explores the relationship between savings and investment in Nigeria during the period 1980-2011. Unlike previous studies, this study employed Autoregressive Distributed Lag (ARDL) Bounds testing approach to test for long run relationship. The short-run dynamics are also captured from error correction model (ECM).The results of the Bounds test suggest that there is a long run relationship between savings and investment. This result is consistent with a number of earlier studies reviewed in the literature that found saving and investment to be cointegrated in the long run. The results also support the Feldstein-Horioka (1980) hypothesis that postulates low capital …