Question

Impact of taxation on government capital expefiture

Answer 1

Answer:

Explanation:

Econometric evidence revealed stationarity of the variables of interest at their first difference while the Johansen cointegration approach also confirms the existence of one cointegrating relationship at 5 percent level of significance. In addition, error correction estimates revealed that while government capital expenditure has positive relationship with manufacturing sector output in Nigeria, recurrent expenditure exerts negative effect on manufacturing sector output. The results showed that one per cent increase in government capital expenditure resulted in an increase of 11.2 per cent in manufacturing sector output while recurrent expenditure decreases it by 26.9 per cent. This reveals that government capital expenditure has positive impact on manufacturing sector output. The study therefore suggests that larger percentage of government expenditure in the annual budget should be on capital component coupled with improved implementation of expenditure policies rather than recurrent expenditure which does not really have a significant impact on the manufacturing sector

Hope it helps you...

Have a great day.

Thanks