Methodology for Nigeria Economic Study
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adeniyioreoluwa077Methodology for Nigeria Economic Study
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Powered by AIThe study employs an ex-post facto research design. This design is chosen because the research relies on data extracted from secondary sources and past events, specifically time-series data. The design is appropriate for examining the effect of public debt and institutional quality on economic performance over a 30-year period from 1995 to 2024 .
The study employs inferential statistics, particularly time series analysis, for hypothesis testing. These statistics determine the statistical significance within the data and enable the researcher to generalize the findings. By using techniques such as the Phillip Peeron unit-root tests, the study checks for stationarity and co-integration among variables .
The correlation matrix is significant because it helps detect multicollinearity among independent variables. Multicollinearity, the presence of association between two exploratory variables in a linear regression model, can affect the accuracy of the analysis. The correlation matrix ensures that the relationships between public debt, institutional quality, and economic performance variables are properly understood and analyzed .
The 30-year period from 1995 to 2024 is selected to capture a comprehensive timeframe that includes various economic cycles and policy changes in Nigeria. This long duration allows for a robust analysis of trends and long-term effects of public debt and institutional quality on economic performance. The choice impacts the findings by providing a wide scope for observing structural changes, ensuring relevant historical context, and enhancing the reliability of statistical inferences .
The Phillip Peeron (PP) unit-root tests are used to check the stationarity of time series data. Stationarity is crucial because it indicates that a variable's statistical properties, such as mean and variance, are consistent over time. By performing these tests, the study ensures the validity of the linear regression model it employs, allowing for reliable analysis of the relationship between variables such as public debt, institutional quality, and economic performance .
The study uses descriptive statistics to measure matrix structures, central tendency, and dispersion. Key parameters considered include mean, median, minimum, maximum, and standard deviation. Additionally, skewness and normality of the data are reported to describe the traits of variables used in the designated models .
Public debt and institutional quality are central to the study's model as independent variables. They are represented by proxies such as Treasury Bills, Ways and Means Advances, Multilateral Debts for public debt, and Government Effectiveness, Corruption Perception Index for institutional quality. These variables are analyzed to understand their effect on economic performance (ECP), with the proxies illustrating different facets of each independent variable and contributing to a comprehensive analysis of their impacts .
In the study's model specialization, economic performance (ECP) is defined using proxies like Gross Domestic Product Growth Rate (GDPGR), Human Development Index (HDI), Per Capita Income (PCI), Unemployment Rate (UPRT), and Inflation Rate (INRT). These proxies serve as dependent variables within the empirical model, capturing different aspects of economic performance to be analyzed against independent variables such as public debt and institutional quality .
The study ensures ethical considerations by sourcing data from reputable secondary sources, such as the World Bank Development Indicators and Transparency International Database. These sources provide data that has been ethically compiled and publicly shared. Additionally, by using established data sets, the study avoids issues of privacy and participant consent, maintaining ethical research standards .
The ARDL approach is vital for addressing time-series analysis as it models the relationship between the dependent variable and its lags, as well as lags of independent variables. This technique is particularly useful in small sample sizes and can assess both short- and long-term dynamics between public debt, institutional quality, and economic performance variables. Its flexibility in handling different integration orders of variables further enhances the robustness of the study's econometric modeling .