IDEAS home Printed from https://ideas.repec.org/a/lif/jrgelg/v3y2014p228-240.html
   My bibliography  Save this article

On the Stability of Nigeria’s Import Demand: Do Endogenous Structural Breaks Matter?

Author

Listed:
  • Mohammed Isa Shuaibu

    (Planning and Research Division, Nigeria)

  • Basiru Oyeniran Fatai

Abstract

In this paper, we reassess the traditional import demand function and an augmented version that includes volatility of external reserves and oil revenue inflows as explanatory variables. In each version, we examine the role of regime shifts on the stability of Nigeria’s import demand function which has been ignored in previous studies. Our findings suggest the existence of a long-run relationship between import demand and its determinants. We also present evidence of one-way causality running from changes in relative prices, oil revenue inflows and volatility of international reserves to import demand in Nigeria. However, when structural breaks were introduced, bi-directional causality is observed; indicating the critical role of regime shifts in determining the stability of Nigeria’s import demand. The results make a case for diversifying Nigeria’s revenue inflows in a bid to dampen the effect of contemporaneous shocks that affect external reserve accumulation thereby weakening its import financing capacity.

Suggested Citation

  • Mohammed Isa Shuaibu & Basiru Oyeniran Fatai, 2014. "On the Stability of Nigeria’s Import Demand: Do Endogenous Structural Breaks Matter?," Journal of Reviews on Global Economics, Lifescience Global, vol. 3, pages 228-240.
    • Handle: RePEc:lif:jrgelg:v:3:y:2014:p:228-240
    as

    Download full text from publisher

    File URL: http://www.lifescienceglobal.com/independent-journals/journal-of-reviews-on-global-economics/volume-3/85-abstract/jrge/970-abstract-on-the-stability-of-nigeria-s-import-demand-do-endogenous-structural-breaks-matter
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Vacu, Nomfudo P. & Odhiambo, Nicholas M., 2020. "The Determinants of Import Demand in South Africa: An Empirical Investigation," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 73(1), pages 51-76.
    2. Morlai Bangura & Oluwakemi Ademisola & Olufemi Saibu, 2023. "Estimating Sierra Leone’s Aggregate Import Demand Function Under Binding Foreign Exchange," Applied Economics and Finance, Redfame publishing, vol. 10(1), pages 113127-1131, February.
    3. Ubong Edem Effiong, 2022. "Foreign Exchange Reserves and Import Demand in a Developing Economy: New Evidence from Nigeria," International Journal of Business Management and Finance Research, Academia Publishing Group, vol. 5(2), pages 85-99.

    More about this item

    Keywords

    Import; Structural Breaks; Cointegration; Causality; Nigeria;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:lif:jrgelg:v:3:y:2014:p:228-240. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Faisal Ameer Khan (email available below). General contact details of provider: http://www.lifescienceglobal.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.