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International Competitiveness and Growth of the Nigerian Economy: A Structural VAR-Based Perspective

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  • Alege, Philip O.

    (Department of Economics and Development Studies, College of Development Studies, Covenant University, Ota, Nigeria)

  • Okodua, Henry

    (Department of Economics and Development Studies, College of Development Studies, Covenant University, Ota, Nigeria)

Abstract

The empirical relationship between international competitiveness of the Nigerian economy and its consequences on economic growth dynamics was investigated in this study. Using export performance and real effective exchange rate as proxies for international competitiveness of the Nigerian economy, the relationship between international competitiveness of the Nigerian economy and its growth dynamics have been analytically explored in this study using the structural VAR framework. The study found that growth of real output contemporaneously responds positively to a positive shock to real effective exchange rate but responded contrary to theoretical expectation in the opposite direction to a positive shock to export performance. The structural/orthogonalized impulse response analysis and the forecast error variance decomposition results were largely consistent with theoretical expectations as well as the short-run SVAR results. These results suggest that there are no serious misalignment issues with the Nigerian currency but cast doubt on the ability of the current export structure of the Nigerian economy to be growth inducing.

Suggested Citation

  • Alege, Philip O. & Okodua, Henry, 2014. "International Competitiveness and Growth of the Nigerian Economy: A Structural VAR-Based Perspective," Research in Applied Economics, Macrothink Institute, vol. 6(4), pages 53-74, December.
    • Handle: RePEc:mth:raee88:v:6:y:2014:i:4:p:53-74
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    References listed on IDEAS

    as
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    5. Krugman, Paul R, 1996. "Making Sense of the Competitiveness Debate," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 12(3), pages 17-25, Autumn.
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    Cited by:

    1. Ngozi Adeleye & Evans Osabuohien & Ebenezer Bowale & Oluwatoyin Matthew & Emmanuel Oduntan, 2018. "Financial reforms and credit growth in Nigeria: empirical insights from ARDL and ECM techniques," International Review of Applied Economics, Taylor & Francis Journals, vol. 32(6), pages 807-820, November.
    2. Mariusz Hamulczuk & Karolina Pawlak, 2022. "Determinants for international competitiveness of the food industry in 43 countries worldwide: evidence from panel models," Equilibrium. Quarterly Journal of Economics and Economic Policy, Institute of Economic Research, vol. 17(3), pages 635-667, September.
    3. Philip O. Alege & Queen-Esther Oye & Omobola O. Adu & Barnabas Amu & Tolu Owolabi, 2017. "Carbon Emissions and the Business Cycle in Nigeria," International Journal of Energy Economics and Policy, Econjournals, vol. 7(5), pages 1-8.

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