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Rivers State University, Port Harcourt.
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| Title: | Empirical Analysis of the Impact of Trade Openness on Economic Growth in Nigeria |
| Author(s): | Amadi S. N. & NWAKALOR Rosemary Adaobi |
| Abstract: | In this study, the effect of trade openness on economic growth in Nigeria was examined using time series data between 1981 and 2019. In addition to trade openness, exports and imports were introduced to the model following their link to economic growth as documented in extant literature. The nonlinear autoregressive distributed lag (NARDL) model was applied to estimate the contributions of the partial sums of the positive and negative changes in trade openness, exports and imports to real gross domestic product (GDP). The unit root test results showed that the variables are mixed integrated. While trade openness is integrated of order zero, the other variables in the model were integrated of order one. Evidence of long run relationship among the variables was established from the bounds cointegration test. The estimated model showed that real GDP responds to positively to positive changes in trade openness in both long and short run. This implies that increase in trade openness creates opportunity for economic growth in Nigeria. The results further showed evidence of significant positive contribution of exports to economic growth whereas imports negatively contributed to economic growth during the study period. This indicates that exports have the potentials of fostering economic growth. Given the findings, this study recommends that policymakers should ensure that the trade openness is associated with improvement in critical infrastructures and strong institutions considered necessary to stimulate the rapid and sustained growth of the Nigerian economy. |
| Keywords: | Economic growth, Trade openness, Exports, Imports, real GDP |
| Journal: | Journal of Contemporary Research in Economics and Development Studies (JCREDS) |
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