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US Trade Policy Uncertainty and Nigeria’s Participation in Global Value Chains: Evidence from Frequency Domain Causality, Wavelet Coherence Analysis, and Time-Varying Causality

Author

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  • Ayodele Folorunso Oshodi

    (University of Ilorin)

  • Godwin Olasehinde-Williams

    (Istanbul Ticaret University
    Azerbaijan State University of Economics)

Abstract

This study examines for the first time whether trade policy uncertainty emanating from the United States significantly predicts Nigeria’s participation in global value chains. It further examines the kind of global value chain participation in Nigeria (forward or backward linkages) that is most predictable by the United States trade policy uncertainty. To achieve the study objective, frequency domain causality, wavelet coherence analysis, and time-varying causality are employed in analyzing annual data sets over the period 1990–2019. The summary of the study findings is as follows; first, trade policy uncertainty emanating from the United States significantly predicts Nigeria’s overall integration into global value chains. Second, there is a positive association between Nigeria’s integration into global value chains and the United States trade policy uncertainty. Third, Nigeria’s overall integration into global value chains is highly correlated with the United States trade policy uncertainty in periods around the global economic crisis of 2007/08 and Nigeria’s recession of the late 2010s. Fourth, most of the predictability noticed in the relations between trade policy uncertainty generated by the United States and the overall global value chain participation is caused by the relations between the United States trade policy uncertainty and Nigeria’s forward linkage into global value chain participation.

Suggested Citation

  • Ayodele Folorunso Oshodi & Godwin Olasehinde-Williams, 2025. "US Trade Policy Uncertainty and Nigeria’s Participation in Global Value Chains: Evidence from Frequency Domain Causality, Wavelet Coherence Analysis, and Time-Varying Causality," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 16(1), pages 189-214, March.
  • Handle: RePEc:spr:jknowl:v:16:y:2025:i:1:d:10.1007_s13132-024-01917-w
    DOI: 10.1007/s13132-024-01917-w
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    More about this item

    Keywords

    United States; Nigeria; Global value chains; Trade policy uncertainty; Frequency domain causality; Wavelet coherence analysis;
    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
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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