Trade Openness and Industrial Growth: Evidence from Nigeria

Abstract

This study examines the long-run and short-run relationship between industrial production and trade openness in Nigeria during the period from 1986 to 2008 by using quarterly data. It employs the ARDL bounds testing methodology developed by M. Hashem Pesaran, Yongcheol Shin, and Richard J. Smith (2001). The results of both the long-run analysis and the short-run error correction model (ECM) indicate that trade openness has a significant and positive impact on industrial production. The Toda-Yamamoto causality analysis shows that there is one-way Granger causality, running from trade openness to industrial production.

Key words: Trade openness, Nigeria, Co-integration, ARDL method.
JEL: C22, F00, O55.

Rad istražuje dugoročnu i kratkoročnu vezu između industrijske proizvodnje i trgovinske otvorenosti u Nigeriji tokom perioda od 1986. do 2008. Godine korišćenjem kvartalnih podataka. Koristi graničnu ARDL metodologiju razvijenu od strane M. Hashem Pesaran, Yongcheol Shin, i Richard J. Smith (2001). Oba rezultata, dugoročne analize i kratkoročnog modela sa korekcijom greške (ECM) ukazuju da trgovinska otvorenost ima signfikantan i pozitivan uticaj na industrijsku proizvodnju. Toda-Yamamoto analiza uzročnosti pokazuje da postoji jednosmerna Granger uzročnost, koja se kreće od trgovinske otvorenosti ka industrijskoj proizvodnji.

Ključne reči: Trgovinska otvorenost, Nigerija, Kointegracija, ARDL model.