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Empirical Analysis of Trade and Economic Growth Nexus: A Regression-Based Approach

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  • Udegbule, Chima Stanley

    (Department of Economics, Topfaith University, Mkpatak, Akwa Ibom State, Nigeria)

  • Chinanuife, Emmanuel

    (Department of Economics, Topfaith University, Mkpatak, Akwa Ibom State, Nigeria)

  • Ekadi, Hannah Ebikiwenimo

    (Federal Polytechnic Ekowe, Bayelsa State, Nigeria)

  • Esara, Esther

    (Department of Economics, Topfaith University, Mkpatak, Akwa Ibom State, Nigeria)

  • Ndah-John, Onyekachukwu Judith

    (Department of Accounting, Topfaith University, Mkpatak, Akwa Ibom State, Nigeria)

Abstract

The nexus between trade and growth can be traced back to the mercantilist theoretical analysis. The expositions and assumptions that underline the mercantilist theory provides clear insights into how trade stimulates economic growth in a country. This study tries to examine the trade-growth correlation of the Nigerian economy between 1980 and 2023. The econometric model adopted in this study was estimated using Ordinary Least Square (OLS) with data of the macroeconomic variables from the Central Bank of Nigeria Statistical Bulletin. The empirical results from the econometric analysis showed that there was a structural break of the Nigerian economy as a result of trade liberalization of 1986. Oil exports and imports have a positive and significant impact on growth. Non-oil exports have a positive but insignificant impact on growth, while inflation had negative but significant impact on growth and exchange rate had a negative and significant impact on growth. From the results, it was recommended that, there is need for intensive resource industries, gradual scaling down of barriers to trade, and promotion of domestic and foreign investment in the service industries.

Suggested Citation

  • Udegbule, Chima Stanley & Chinanuife, Emmanuel & Ekadi, Hannah Ebikiwenimo & Esara, Esther & Ndah-John, Onyekachukwu Judith, 2025. "Empirical Analysis of Trade and Economic Growth Nexus: A Regression-Based Approach," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 9(15), pages 732-741, June.
    • Handle: RePEc:bcp:journl:v:9:y:2025:i:15:p:732-741
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    References listed on IDEAS

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    1. Balassa, Bela, 1978. "Exports and economic growth : Further evidence," Journal of Development Economics, Elsevier, vol. 5(2), pages 181-189, June.
    2. Alimi, Santos R. & Muse, Bernard O., 2012. "Export - led growth or growth – driven exports? Evidence from Nigeria," MPRA Paper 53468, University Library of Munich, Germany.
    3. Ojeyinka, Titus A. & Adegboye, Abiodun A., 2017. "Trade Liberalization and Economic Performance in Nigeria: Evidence from Agricultural and Manufacturing sectors," African Journal of Economic Review, African Journal of Economic Review, vol. 5(3), November.
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