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Maritime Trade and Economic Development: A Granger Causality and Bound Test Approach

Author

Listed:
  • Osadume Richard

    (Nigerian Maritime University; Dept. Marine Economics & Finance, Nigeria;)

  • Blessing Uzoma, C.

    (Nigerian Maritime University; Dept. Marine Economics & Finance, Nigeria;)

Abstract

This paper investigates Maritime trade and economic development: A granger causality and Bound test approach. Most scholars believe that maritime trade openness will transform economy into a developed nation while some disagree. The main objective of this research is to examine the relationship between maritime trade and economic development; specifically, to ascertain whether maritime trade granger-causes economic development; and to determine whether there is a co-integration between maritime trade and economic development. The study used secondary data obtained from the Central Bank of Nigeria and the United Nations development Programme, and tested the effect of independent variables on a dependent variable. The variables were tested using Stationarity, heteroskedasticity, Ramsey reset, granger-causality and ARDL Bounds test at the 5% level of significance. The findings revealed that maritime trade proxy by trade openness had a significant effect on economic development captured by HDI and the ARDL Bound test showed a significant effect of trade openness on economic development. The study concludes that maritime trade granger-causes economic development with a Bi-directional causal relationship and significant co-integration exists between them; and recommends among others the provision of conducive environment and cheap funding by the government to encourage the growth of maritime trade.

Suggested Citation

  • Osadume Richard & Blessing Uzoma, C., 2020. "Maritime Trade and Economic Development: A Granger Causality and Bound Test Approach," LOGI – Scientific Journal on Transport and Logistics, Sciendo, vol. 11(2), pages 23-32, November.
    • Handle: RePEc:vrs:logitl:v:11:y:2020:i:2:p:23-32:n:3
    DOI: 10.2478/logi-2020-0012
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    References listed on IDEAS

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    Cited by:

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    2. Adedotun Joseph Adenigbo & Joash Mageto & Rose Luke, 2023. "Effect of shipping trade on economic growth in Nigeria: the Vector Error Correction Model (VECM) approach," Journal of Shipping and Trade, Springer, vol. 8(1), pages 1-18, December.

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