The Complementarity Effect of Intensive and Extensive Margins of Exports Diversification on Growth: Empirical Evidence from Nigerian Data

Research background Two main theoretical patterns of exports diversification have evolved in development economics: the intensive- and extensive-export margins. Myriads of studies have assessed the relative merits of both patterns of diversification in promoting economic growth. Empirical literature, however, has thus far produced mixed and inconclusive results. Purpose This paper aims to examine the impact of complementarity between the aforementioned patterns of exports diversification on economic growth in Nigeria. Research methodology The study utilized the dynamic linear autoregressive distributed lag bounds testing procedure for the time-series analysis covering the period 1960–2022. Results Empirical results revealed that both patterns of diversification significantly reinforce each other and jointly exert a strong positive effect on growth. These findings have numerous insightful and far-reaching policy implications. First, to maximize the growth-enhancing effect of export diversification patterns, both margins should not be considered in isolation. Second, apt simultaneous policies are needed to strengthen/enhance their effects on growth. Novelty To date, there has been almost no attention paid in the literature to the complementarity impact of both patterns of diversification in advancing growth (as existing studies largely focus on individual impacts of extensive and intensive margins on growth). This study accordingly fills this research gap.