Vol 4 No 5 (2018): IJRDO - Journal of Business Management
Articles

TRADE LIBERALIZATION AND ECONOMIC GROWTH IN NIGERIA: A COINTEGRATION ANALYSIS (1980-2015)

ANAH STANLEY ARINZE
Bio
ONWUCHEKWA FAITH CHIDI
Bio
Published May 31, 2018
Keywords
  • Trade liberalization,
  • openness,
  • structural change,
  • economic growth
How to Cite
Ejike, D., ARINZE, A. S., & CHIDI, O. F. (2018). TRADE LIBERALIZATION AND ECONOMIC GROWTH IN NIGERIA: A COINTEGRATION ANALYSIS (1980-2015). IJRDO - Journal of Business Management (ISSN: 2455-6661), 4(5), 81-94. Retrieved from https://ijrdo.org/index.php/bm/article/view/2076

Abstract

This study examined the effect of trade liberalization on economic growth in Nigeria, using the Gross domestic product (GDP) as proxy for economic growth. The study made use of set of data that spanned (1980 – 2015). Ordinary Least Squares (OLS) was used in estimating the effect of trade liberalization on economic growth in Nigeria with a view to ascertaining whether long-run relationship exists between the two and also used in verifying for structural change that may have occurred within the implementation period of a free trade regime that started in 1986. Data for the study were sourced from World Development Indicators (WDI) of the World Bank and Statistical Bulletin of the Central Bank of Nigeria (CBN) various issues. Results indicate that liberalization has positive and significant effect on economic growth in Nigeria, with an evidence of a long-run relationship. Similarly, strong evidence was found to support structural change that took place in 1986 when free trade policy was adopted. The results also presented a violation of the a priori in the case of export and import which showed negative and positive signs respectively. In the light of the above, it was recommended among others that an enabling environment should be provided by the government in the areas of infrastructural facilities to boost domestic production, revitalize ailing industries to enable them produce goods that can compete favourably with their foreign counterparts in the international market to enhance further growth in Nigerian economy.

Downloads

Download data is not yet available.

References

Ayorinde, F. and Olayinka, O. (2012). Trade Liberalization and technological acquisition in the manufacturing sector: evidence from Nigeria: AERC Research Paper, NO 117, August.
Babatunde, M.A. (2009). Can trade liberalization stimulate export performance in Sub-Saharan Africa? Journal of International and Global Economic Studies, 2(1): 68-92.
Sakyi, D. (2011). Trade openness, foreign aid and economic growth in post liberalization Ghana: an application of ARDL bounds test. Journal of Economics and International Finance, 3(3): 146-156.
Ersoy, I. and Deniz, P. (2011). Financial and trade openness: evidence on emerging market regional groups. European Journal of Economics, Finance and Administrative Sciences, 39: 71-78.
Effiom, L., Ubi, P.S., Okon, E.O. and Itam, E.E. (2011). Trade liberalization and human capital in Nigeria: a vector autoregressive analysis. European Journal of Economics, Finance and Administrative Sciences, 40: 154-168.
Okpako, G.U. (2005). Public finance, Ikeja: Tivolick.
Atoyebi, K.O., Akinde, J.O., Adekunle, F.O. and Edun, F. (2012). Foreign trade and economic growth in Nigeria: an empirical analysis. American Academic and Scholarly Research Journal, 4(5): 211-223.
Utkulu, U. and Ozdemir, D. (2004). Does trade liberalization cause long-run economic growth in Turkey? Economic and Business Change and Restructuring, 37 (3): 245-266.
Nwosa, P.I., Saibu, M.O., Fakunle, O.O. (2012). The effect of trade liberalization on trade tax revenue in Nigeria. African Economic and Business Review, 10(2): 28-43.
Manni, U.H. and Afzai, M.N.I. (2012). Effect of trade liberalization on economic growth of developing countries: a case of Bangladesh economy. Journal of Business, Economics and Finance, 1(2): 37-44.
Krugmann, P. (1994). The myth of Asia’s miracle. Foreign Affairs (Nov. – Dec): 62-78.
Feder, G. (1983). Exports and economic growth. Journal of Development Economics, 12:59-73.
Helpman, E. and Krugman, P.R. (1985). Market structures and foreign trade. Cambridge. MIT Press.
Esfahani, H.S. (1991). Exports, imports and economic growth in semi-industrial countries. Journal of Development Economics, 35:93-116.
Lucas, R.E. (1988). On the mechanics of economic development. Journal of Monetary Economics, 2(2): 3-42.
Alisna, A. and Rodrick, D. (1999). Distributive politics and economic growth. Quarterly Journal of Economics, 109:443-465.
Ademola, I.S., Oluseyi, A.E., Ibiyemi, O. and Babatunde, G.A. (2013). Trade openness and economic growth in Nigeria (1981-2009): an empirical analysis.
Olaifa, F.G., Subair, K. and Biala, M.I. (2013). Trade liberalization and economic growth in Nigeria: a cointegration analysis. Journal of Business, Economics and Finance, 2(3): 43-52.
Arhan, S.E. (2007). Differential effects of trade liberalization on economic growth: role of human capital accumulation. American Economic Review, 50(6): 130-140.
Sulaiman, D.M. (2010). The effectiveness of financial development and openness on economic growth: case study of Pakistan. European Journal of Social Science, 13(3): 120-129.
Winters, A.L. (2004). Trade liberalization and economic performance: an overview. The Economic Journal 114 USA.