The growth effect of crude oil revenue and capital investment: The Nigerian perspective.

This study assesses how oil revenue and capital investment affected Nigeria's economic growth from 1981 to 2020. The study uses the autoregressive distributed lag (ARDL) and Toda–Yamamoto causality models for analysis. More so, we considered the possibility of structural break and thus utilised the Lee–Strazicich LM unit root test. The structural break unit roots confirm the stationarity of the variables with identified breakpoints. Therefore, the ARDL result reveals that crude oil revenue enhances short‐ and long‐term economic growth; the short‐term effect is insignificant, but it is very substantial in the long term. Again, capital investment positively but insignificantly drives short‐period economic growth. However, capital investment substantially promotes long‐term economic growth. The causality evidence indicates that crude oil revenue causes capital investment and economic growth. Also, capital investment and economic growth exhibit bidirectional causality. The evidence suggests improving oil revenue by increasing crude oil exports and ensuring pipeline security to reduce oil theft. The government should channel crude oil earnings toward capital investment to promote real economic productivity. [ABSTRACT FROM AUTHOR]