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<p>The study focused on exploring the nexus between entrepreneurial activity and economic growth in Nigeria, an underexplored area in the African body of knowledge. Data spanning 41 years (1981–2021) from the World Bank and the Central Bank of Nigeria were utilised. An Autoregressive Distributed Lag (ARDL) model was employed to analyse the relationship between private sector credit (PSC) as a proxy for entrepreneurial activity and gross domestic product per capita growth (GDPPC). Findings from the bounds cointegration test indicated a long-term association, revealing a significant negative relationship between entrepreneurial activity and economic growth. The study was subjected to various diagnostic tests, supporting the robustness of the estimation and its divergence from issues related to the Classical Linear Regression Model (CLRM). The study reveals that a lack of access to finance, high corruption, institutional inefficiency, and heavy taxes imposed by rent seekers lead to resources being channelled into an unproductive path, resulting in weaker growth potential. This study recommends that the Nigerian government establish impartial ombudspersons across its 36 States to mediate disputes between government officials and entrepreneurs, ensuring zero tolerance for corruptive behaviour. A mandatory digital monitoring system and legal protection for entrepreneurs should be established and decentralised by the Federal, State, and Local governments, with clear and transparent access to credit facilities being closely monitored.</p>

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Relationship between entrepreneurship and economic growth in Nigeria

  • 期刊论文

  • 发表日期：

    2026年1月2日

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  • Augustine Abakpa,
  • Ondřej Dvouletý

摘要

The study focused on exploring the nexus between entrepreneurial activity and economic growth in Nigeria, an underexplored area in the African body of knowledge. Data spanning 41 years (1981–2021) from the World Bank and the Central Bank of Nigeria were utilised. An Autoregressive Distributed Lag (ARDL) model was employed to analyse the relationship between private sector credit (PSC) as a proxy for entrepreneurial activity and gross domestic product per capita growth (GDPPC). Findings from the bounds cointegration test indicated a long-term association, revealing a significant negative relationship between entrepreneurial activity and economic growth. The study was subjected to various diagnostic tests, supporting the robustness of the estimation and its divergence from issues related to the Classical Linear Regression Model (CLRM). The study reveals that a lack of access to finance, high corruption, institutional inefficiency, and heavy taxes imposed by rent seekers lead to resources being channelled into an unproductive path, resulting in weaker growth potential. This study recommends that the Nigerian government establish impartial ombudspersons across its 36 States to mediate disputes between government officials and entrepreneurs, ensuring zero tolerance for corruptive behaviour. A mandatory digital monitoring system and legal protection for entrepreneurs should be established and decentralised by the Federal, State, and Local governments, with clear and transparent access to credit facilities being closely monitored.