DOES INTERNATIONAL TRADE DRIVE ECONOMIC GROWTH IN DEVELOPING NATIONS : EMPIRICAL EVIDENCE FROM NIGERIA
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This study investigates whether international trade drives economic growth in developing nations, with specific evidence from Nigeria over the period 1990–2024. Using annual data from the World Bank’s World Development Indicators (WDI) and the Central Bank of Nigeria (CBN), the study employed the Autoregressive Distributed Lag (ARDL) bounds testing approach to capture both short-run and long-run dynamics. The results reveal the existence of a long-run cointegrating relationship among GDP, trade openness, gross capital formation, and exchange rate. In the short run, trade openness and exchange rate positively and significantly influenced economic growth, while gross capital formation exerted a negative effect. The error correction term was negative and significant, indicating a stable adjustment back to equilibrium. Diagnostic tests confirmed the robustness of the model, showing no serial correlation or heteroskedasticity. The study concludes that trade openness and exchange rate stability are key drivers of growth, while inefficiencies in capital formation constrain performance. It recommends policies to diversify exports, enhance investment efficiency, and stabilize macroeconomic conditions to fully harness the benefits of international trade for sustainable growth in Nigeria.
| Pages | 74-83 |
| Year | 2025 |
| Issue | 2 |
| Volume | 5 |
