TRADE AND ECONOMIC GROWTH IN NIGERIA

AUTHOR: OZULUMBA IFEANYI JOHN

DEPARTMENT: ECONOMICS

AFFILIATION: NNAMDI AZIKIWE UNIVERSITY, AWKA

The objectives of this paper are to analyze the relationship between trade and economic growth, as well as determining the direction of causality between them. To do this we specify an endogenous growth model similar to the one used by Fosu and Magnum (2002) and employed the unit root test, using the Augmented Dickey fuller test and the cointegration test, using the Johansen and Juselius Cointegration test. As the variables are I (1) and cointegrated, an error correction model was specified and the results show that trade, foreign direct investment and exchange rate have a positive and insignificant relationship with economic growth. Inflation was found to have a positive and significant relationship with economic growth, while human capital was found to be negative and significant relationship with economic growth. The causality test reveals trade does not granger causes economic growth while there is a feedback effect from economic growth, implying that greater growth rate in economic growth is required to expand the trading capacity of the country. The study among other things, recommends the adoption of deeper and significant policy and practical measures to improve the contribution of trade and make it more significant to the well being of people. 

TO VIEW THE FULL CONTENT OF THIS DOCUMENT, PLEASE VISIT THE UNIZIK LIBRARY WEBSITE USING THIS LINK, http://naulibrary.org/dglibrary/admin/book_directory/Thesis/11084.pdf

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