Evaluating causality between petroleum and gas and construction sectors in developing economies
by Najimu Saka; Dorcas Titilayo Moyanga
International Journal of Sustainable Real Estate and Construction Economics (IJSRECE), Vol. 2, No. 3/4, 2023

Abstract: Despite the fact that the construction industry contributes to the global economy, the majority of developing nations rely primarily on oil and gas resources. Consequently, this study examined the causal relationship existing between the construction industry and the Petroleum and Gas Sector (PGS) in Nigeria. Time series data over 37-year period (1981-2017) was obtained from the Central Bank of Nigeria's statistical bulletin and estimated using econometric approach including causality, endogeneity, etc. The weak and strong exogeneity tests revealed that PGS has significant impact on construction industry while the short-run causality test showed an insignificant impact. The study concludes that the PGS remain an enclave with little forward and backward linkages to the Nigerian economy and thus made non-commensurate contributions to the construction industry. The study therefore suggests that Nigerian government should embark on massive local content development to create extensive links between the PGS and the construction sector.

Online publication date: Thu, 01-Feb-2024

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