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Globalisation, Economic Growth and Income Inequality in Nigeria

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  • NWOSA Philip Ifeakachukwu

Abstract

This article examines the link between globalisation, economic growth and income inequality in Nigeria using annual secondary data over the period 1981–2018. Specifically, it attempts to examine the following questions: (a) What is the direction of causation among globalisation, economic growth and inequality? (b) What is the impact of globalisation and economic growth on inequality? (iii) Do trade globalisation and financial globalisation have differential impacts on inequality in Nigeria? The article used both vector error correction modelling (VECM) and auto-regressive distributed lag (ARDL) techniques. The VECM results show a unidirectional causality from inequality and globalisation to economic growth in the long run, whereas a unidirectional causation was observed from inequality to economic growth in the short run. The ARDL estimate shows that globalisation and economic growth are significant determinants of inequality in Nigeria. Furthermore, it is observed that trade and financial globalisation influenced income inequality differently. In the light of these findings, the article recommends that the foreign direct investment should be channelled towards empowering the poor, and the dividends of economic growth should be evenly distributed to reduce the income inequality gap.

Suggested Citation

  • NWOSA Philip Ifeakachukwu, 2020. "Globalisation, Economic Growth and Income Inequality in Nigeria," Indian Journal of Human Development, , vol. 14(2), pages 202-212, August.
    • Handle: RePEc:sae:inddev:v:14:y:2020:i:2:p:202-212
    DOI: 10.1177/0973703020948484
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    References listed on IDEAS

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    2. Ongo Nkoa Bruno Emmanuel & Song Jacques Simon & Balla Mekongo Célestin Ghislain, 2021. "Inequalities in Africa : Does financial integration matter?," Economics Bulletin, AccessEcon, vol. 41(3), pages 1983-1993.

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