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Rivers State University, Port Harcourt.
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| Title: | International Trade and Economic Growth in Nigeria |
| Author(s): | S.N. Amadi, C.R. Amadi & Omachi Thankgod Chika |
| Abstract: | This study investigates the effect of international trade on economic growth in Nigeria. Secondary data were obtained from the World Development Indicators, 2021. Foreign direct investment (FDI), gross capital formation (GCF), and trade openness were used to proxy the independent variables, while real gross domestic product (RGDP) was used to capture the dependent variable. The formulated model was subjected to a unit root test using the Augmented Dickey-Fuller (ADF) Unit Root Approach. The outcome of the ADF test showed that the variables were not stationary at levels I(0) but became stationary after the first difference I(1). Based on this, the study adopted the Johansen approach to cointegration to determine if there is a long-run relationship between the variables, while the error correction model was utilized to ascertain the behavior of the variables and the speed of adjustment. The Parsimonious ECM results reveal that foreign direct investment (FDI) has a positive and statistically significant impact on real gross domestic product (RGDP) in Nigeria, while gross capital formation (GCF) had a negative and not statistically significant impact on RGDP in Nigeria. Finally, trade openness (TDN) has a negative and statistically significant impact on RGDP in Nigeria. Based on the findings, the study recommends, among other things, that the federal government should implement policies that make the country more attractive to foreign investors by improving the ease of doing business, ensuring political stability, enhancing legal protections for investments, and providing incentives such as tax breaks or grants; the government should investigate the sectors where capital formation is directed and ensure that investments are made into high-impact areas such as technology, education, and infrastructure; and that the Nigerian government should continue to engage in and expand its trade agreement. |
| Keywords: | international. trade, economic |
| Journal: | Journal of Contemporary Research in Economics and Development Studies (JCREDS) |
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