Modeling the Construction Sector and Oil Prices toward the Growth of the Nigerian Economy: An Econometric Approach

Okoye, Peter Uchenna; Mbakwe, Chinwendu Christopher; Igbo, Evelyn Ndifreke

doi:10.3390/economies6010016

Cited by 24 publications

(23 citation statements)

References 30 publications

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“…In fact, it portends that the inflows of funds as a result of an increase of oil price in Nigeria found their way outside the country and do not perform economic development goals. This argument is supported by the results of [39,[62][63][64] in one part, but contrary to [33,36,61] in another part.…”

Section: Granger Causality Testmentioning

confidence: 57%

“…Unfortunately, studies focusing on the influence of oil prices on the construction sector are sparse and limited. The few available literatures are superficial and lacked consensus despite the construction sector's central role in the economic development of every nation especially in the developing countries [33,36,39,[60][61][62][63][64].…”

Section: Literature Reviewmentioning

confidence: 99%

“…A recent study conducted by Okoye, et al [64] examines the interrelationship between the construction sector, oil prices, and the actual gross domestic product (GDP) in Nigeria. The study found that even though very strong positive and significant correlations exist between the construction sector output and total GDP output, the construction sector output and oil prices, and the total GDP output and oil prices, these linear relationships only exist for a short time.…”

Section: Literature Reviewmentioning

confidence: 99%

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The Dynamics of Oil Prices in the Nigerian Construction and Economic Growth

Okoye

Igbo

2018

SAJSSE

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Section: Granger Causality Testmentioning

confidence: 57%

Section: Literature Reviewmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

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The Dynamics of Oil Prices in the Nigerian Construction and Economic Growth

Okoye

Igbo

2018

SAJSSE

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“…Their results revealed that oil market uncertainty lowers investment only when it is caused by global consumption demand shocks, while market uncertainty is found to have a negative effect on investment with a one-year lag. Lastly, Okoye et al (2018) empirically examined the interrelationship between the construction sector, oil prices and gross domestic product (GDP) in Nigeria, finding short-run linear relationships among these macroeconomic variables. They argued that neither the construction sector nor oil prices directly influence the aggregate economy.…”

Section: Literature Reviewmentioning

confidence: 99%

On the volatility of daily stock returns of Total Nigeria Plc: evidence from GARCH models, value-at-risk and backtesting

2020

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This study investigates the volatility in daily stock returns for Total Nigeria Plc using nine variants of GARCH models: sGARCH, girGARCH, eGARCH, iGARCH, aGARCH, TGARCH, NGARCH, NAGARCH, and AVGARCH along with value at risk estimation and backtesting. We use daily data for Total Nigeria Plc returns for the period January 2, 2001 to May 8, 2017, and conclude that eGARCH and sGARCH perform better for normal innovations while NGARCH performs better for student t innovations. This investigation of the volatility, VaR, and backtesting of the daily stock price of Total Nigeria Plc is important as most previous studies covering the Nigerian stock market have not paid much attention to the application of backtesting as a primary approach. We found from the results of the estimations that the persistence of the GARCH models are stable except for few cases for which iGARCH and eGARCH were unstable. Additionally, for student t innovation, the sGARCH and girGARCH models failed to converge; the mean reverting number of days for returns differed from model to model. From the analysis of VaR and its backtesting, this study recommends shareholders and investors continue their business with Total Nigeria Plc because possible losses may be overcome in the future by improvements in stock prices. Furthermore, risk was reflected by significant up and down movement in the stock price at a 99% confidence level, suggesting that high risk brings a high return.

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“…The linkages of the construction industry to the overall economy of Nigeria have been studied by several research workers such as Oldinrin et al (2012) and Okoye et al (2018) indicating the relative decline of the construction industry in recent years largely due to the relatively lower export earnings from crude oil, Nigeria's major export earner. Strong positive relationships between the outputs of the construction industry and the overall economy were shown to exist in the short-term periods.…”

Section: Overview Of Empirical Work On Economic Shocks and The Growtmentioning

confidence: 99%

Economic Shocks and the Growth of the Construction Industry in Ghana Over the 50-Year Period From 1968 to 2017

Anaman¹,

Egyir²

2019

RWE

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The study analyses the relationship between the growth of the construction industry and economic shocks in Ghana over the 50-year period from 1968 to 2017 using an autoregressive modelling scheme that incorporates several economic shocks as separate independent variables. The independent variables used in the model included one positive economic shock and five negative shock variables. The positive shock variable was the sharply increased government expenditures on construction activities in selected years that allowed the government to host international events in Ghana within a period of two years. The five adverse economic shocks included in the model were political instability related to military coups, exchange rate depreciation of the local currency, Ghana cedi, with respect to the United States dollar, the average yearly temperature, aggregate electricity energy production shortfall related to a severe El Nino weather phenomenon, and incidence of extreme rainfall. The results of the analysis indicated that the most important factor influencing the growth of the construction industry in Ghana over the 50-year study period was political instability. Beyond political instability, the next most important factor was the purposely-driven sharp increases in government expenditures on construction activities for selected years that allowed the country to host international events in the country. The other significant economic shocks were the exchange rate depreciation, average temperatures, and electricity energy production shortfall; all three factors adversely affected the growth of the construction industry. The results of our study are generally consistent with those obtained from the literature concerning the positive and negative effects of economic shocks on the construction industry.

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Modeling the Construction Sector and Oil Prices toward the Growth of the Nigerian Economy: An Econometric Approach

Cited by 24 publications

References 30 publications

The Dynamics of Oil Prices in the Nigerian Construction and Economic Growth

The Dynamics of Oil Prices in the Nigerian Construction and Economic Growth

On the volatility of daily stock returns of Total Nigeria Plc: evidence from GARCH models, value-at-risk and backtesting

Economic Shocks and the Growth of the Construction Industry in Ghana Over the 50-Year Period From 1968 to 2017

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