Economic Growth Factor in Nigeria: The Role of Global Trade
Keywords:International trade, economic growth, export, import, mercantilism
AbstractThe paper examines the contributions of international trade (proxied with export and import values) to economic growth in Nigeria measured by real gross domestic product (RGDP). We used time series data obtained from CBN for a period of 27 years. Augmented Dickey-Fuller (ADF) test was used for the unit root test and the variables were stationary at levels I(0). Johansen’s co-integration test was also conducted to establish short and long run relationships between the two variables. The result shows two co-integrating equations which establish the existence of long run relationship among the variables. Ordinary Least Square statistical technique was used to assess the degree of influence the variables have on each other. The results show that positive relationship exists between the variables, RGDP, export and import. The export parameter is insignificant at 5 percent. The overall model is significant at 5 percent. Finally, we used Granger causality test to study the causality between the variables and realized a uni-directional relationship. Real GDP Granger cause export and import Granger cause RGDP and export. Nigeria needs to increase or diversify her export goods to enjoy more of the benefits of international trade.
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