DOES TRADE OPENNESS INFLUENCE ECONOMIC GROWTH IN NIGERIA?

1 Adeyemi, Adeyinka Emmanuel and 2Odefunsho, Amos Olukayode.

Abstract

There is an increasing argument on whether indeed an increase in trade liberalization (openness)
leads to economic expansion or otherwise. This study intend to make contributions to the argument on
the effect of trade openness on economic development of Nigeria. The study also identified other
factors that affect economic growth in relation to trade openness. The study captured the impact
analysis of trade openness and economic development with existing time-series data from 1986 to
2017. Estimation technique employed followed the Vector Error Correction Model (VECM) to
ascertain the short and long run equilibrium existence. The results of the discovery showed that trade
openness had no remarkable effect on growth in Nigeria within the periods of study but other factors
such as: Foreign Direct Investment and Exchange Rate had significant impact on growth. Therefore,
it is paramount for the government and all the stakeholders to stir their policies towards improving the
exchange rate management in order to further influence the foreign direct investment of the country