Trade Liberalization and Economic Growth In Nigeria; A Cointegration Analysis
Trade Liberalization and Economic Growth In Nigeria; A Cointegration Analysis
Trade liberalization is one of the most controversial policies in international economics and finance. Copious of arguments have been put forward about if free trade and reduction of trade barriers will help the economy or not. Those in favour of the policy believe that it can stimulate economic growth of African economies while others maintained that trade liberalization may not provide positive contribution to long run growth of African economies. This study adopts the ordinary least squares in estimating the influence of trade liberalization on economic growth in Nigeria between1970 and 2012 with a view to examining whether a long term relationship exists between the two and also to check for structural change that may have occurred with the implementation of a free trade regime in 1986.Trade liberalization was conceived as openness and proxied as the ratio of total trade to GDP. Time series data sourced from the World Development indicator (WDI) of the World Bank and the Central Bank of Nigeria (CBN) statistical bulletin and annual reports were analysed. Result shows that liberalization supports economic growth in Nigeria with an evidence of a long run relationship. Strong evidence was found to support a structural change taking place in 1986 with the adoption of free trade policy. However export was reported to be negatively related to growth. The study concluded by recommending that an enabling environment that will engender further growth such as better infrastructural base, adequate financing support adherence to international best practice in export and sound institutional structure be put in place for sustainability. * Corresponding Author: FELIX GBENGA OLAIFA. +2347031942274 E-mail Address: deleconns@yahoo.com, felix.olaifa@kwasu.edu.ng
___
- Ayorinde, F. and Olayinka, O. (2002). Trade Liberalization and Technology Acquisition in the Manufacturing Sector: Evidence from Nigeria. AERC Research Paper, No. 117, August.
- Chaudhry, I.S., Malik, A. and Faridi, M.Z. (2010). Exploring the Causality Relationship Between Trade Liberalization, Human Capital and Economic Growth: Empirical Evidence from Pakistan. Journal of Economics and International Finance, 2(8): 175-182.
- Dollar, D. and Kraay, A. (2001).Trade, Growth and Poverty.World Bank Development Research Group. Washington D.C.
- Ebrill, L., Stotsky, J. and Gropp, R. (1999).Revenue Implication of Trade Liberalization.IMF Occasional Paper 180 IMF Washington D.C.
- Effiom, L., Ubi, P.S., Okon, E.O. and Itam, E.E. (2011). Trade Liberalization and Human Capital in Nigeria: A Vector Autoregressive Analysis. European Journal of Economics, Finance and Administrative Sciences, (40): 154-168.
- Ersoy, I. and Deniz, P. (2011). Financial and Trade openness: Evidence on Emerging Market Regional Groups. European Journal of Economics, Finance and Administrative Sciences, (39): 71
- Frankel, J.A. and Romer, D. (1999). Does Trade Cause Growth? The American Economic Review, 89(3): 379-399.
- Krugman, P.R. (1990). Rethinking International Trade. Massachusetts: The MIT press.
- Manni, U.H.; and Afzal M.N.I. (2012). Effect of Trade Liberalization on Economic Growth of Developing Countries: A Case of Bangladesh Economy. Journal of Business, Economics and Finance, 1(2): 37-44.
- Nwafor, M.C., Adenikinju, A.F. and Ogujiuba, K.K. (2007). The Impact of Trade Liberalization on Poverty in Nigeria: Dynamic Simulations in CGE Model. Poverty and Economic Policy Research Network Working Paper, No.MPIA-2007-16.
- Nwosa, P.I., Saibu, M.O. and Fakunle, O.O. (2012).The Effect of Trade Liberalization on Trade Tax Revenue in Nigeria.African Economic and Business Review, 10(2): 28-43.
- Sakyi, D. (2011). Trade Openness, Foreign Aid and Economic Growth in Post Liberalization Ghana: An Application of ARDL Bounds test. Journal of Economics and International Finance, 3(3):146-156.
- Thirlwall, A.P. (2000). Trade Liberalization and Economic Growth: Theory and Evidence. African Development Bank Economic Research Paper, No 63.
- Yayın Aralığı: Yılda 4 Sayı
- Başlangıç: 2012
- Yayıncı: PressAcademia