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Impact of Trade Openness on Nigerian Economic Growth: An Empirical Investigation, 1970–2011

Author

Listed:
  • Gerald C. Nwadike
  • Ani Kelechi Johnmary
  • Chukwuma Samuel Alamba

Abstract

Geopolitical territories have often engaged in one form of trade or another with their neighbours. That is because no nation in the world can survive without one form of trade with other sovereign states. This study examines the nature of trade openness and economic growth in Nigeria from 1970–2011. The emphasis of this empirical study is to ascertain the impact of trade openness on Nigeria’s economic growth. Causal comparative or ex-post facto research design was adopted in the study. Econometric time series analyses like ADF unit root test, co-integration test and the ordinary least squared (OLS) were employed in the study. The result obtained was used to test the hypotheses, and it was revealed that (i) Trade Openness has positive significant impact on Nigeria’s economic growth; while (ii) Gross Domestic Product (GDP) responds to the shock of Trade Openness value as a proxy of total import and total export divided by GDP as well as change in Exchange Rate (DEXR) within Nigeria’s economy during the period of study. Thus, the co-integration results indicate that there exists long-run relationship among the variables used; hence; the researchers then recommended that there is urgent need for the government to create enabling environment for good trade policy that would attract both foreign and domestic private sector investment in the country. JEL Codes: F13, B27

Suggested Citation

  • Gerald C. Nwadike & Ani Kelechi Johnmary & Chukwuma Samuel Alamba, 2020. "Impact of Trade Openness on Nigerian Economic Growth: An Empirical Investigation, 1970–2011," Foreign Trade Review, , vol. 55(2), pages 239-247, May.
    • Handle: RePEc:sae:fortra:v:55:y:2020:i:2:p:239-247
    DOI: 10.1177/0015732519894153
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    References listed on IDEAS

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    1. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(1), pages 65-94.
    2. Gene M. Grossman (ed.), 1992. "Imperfect Competition and International Trade," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262570939, December.
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    Citations

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    Cited by:

    1. Young Ademola Obafemi, 2022. "Specialization Versus Diversification as Alternative Strategies for Sustainable Growth in Resource-Rich Developing Countries. Case of Nigeria," Studia Universitatis „Vasile Goldis” Arad – Economics Series, Sciendo, vol. 32(3), pages 1-47, September.
    2. Bakari, Sayef & El Weriemmi, Malek & Mabrouki, Mohamed, 2022. "The Impact of Digitalization and Trade Openness on Economic Growth: New Evidence from Richest Asian Countries," MPRA Paper 113816, University Library of Munich, Germany.
    3. Kingsley Ikechukwu Okere & Obumneke Bob Muoneke & Favour Chidinma Onuoha & Philip C. Omoke, 2022. "Tripartite relationship between FDI, trade openness and economic growth amidst global economic crisis in Nigeria: application of combined cointegration and augmented ARDL analysis," Future Business Journal, Springer, vol. 8(1), pages 1-23, December.
    4. Bakari, Sayef, 2022. "Relationship among Domestic Investment, Exports and Economic Growth: Evidence form the Case of Greece," MPRA Paper 114418, University Library of Munich, Germany.

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    More about this item

    Keywords

    Trade openness; GDP; economic growth; Nigeria;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • B27 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - International Trade and Finance

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