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Export - led growth or growth – driven exports? Evidence from Nigeria

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  • Alimi, Santos R.
  • Muse, Bernard O.

Abstract

This paper examined the role of export in the economic growth process in Nigeria. Time series data ranging from 1970 to 2009 was used and the study employs unit root testing, co-integration analysis and VAR Granger Causality/Exogeneity Wald Tests to analyze annual time series data from Nigeria. The study uses three measures of export namely, Total export, Oil export and Non-Oil export. This enhances the stability and robustness of results. The unit root test showed that both economic growth and export are integrated of order one, i.e. 1(1). The cointegration test confirmed for model 1 and model 2 (where total exports and oil exports are used respectively as proxy for Nigeria exports) that economic growth and export are cointegrated, indicating an existence of long run equilibrium relationship between the two as confirmed by the Johansen cointegration test results. However, there is no evidence of cointegration between export and economic growth for model 3. Granger causality was applied to test the causal relationship between GDP and economic growth. The results show that there is evidence of uni-directional causality between export and economic growth in Nigeria in three measures of exports and the direction of causality runs strictly from economic growth to exports. This study provided support for growth-led export in case of Nigeria. Thus effort should be direct towards policies that will enhance economic growth such as import substitution industrialization (ISI) strategy, in order to impact more on exports.

Suggested Citation

  • Alimi, Santos R. & Muse, Bernard O., 2012. "Export - led growth or growth – driven exports? Evidence from Nigeria," MPRA Paper 53468, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:53468
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    References listed on IDEAS

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    Cited by:

    1. Ousama Ben-Salha & Abir Abid & Ghassen El Montasser, 2023. "Linear and Nonlinear Causal Linkages Between Exports and Growth in Next Eleven Economies," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 14(2), pages 1194-1226, June.
    2. Oladapo FAPETU & Segun Daniel OWOEYE, 2017. "Testing the validity of the export-led growth hypothesis in Nigeria: Evidence from non-oil and oil exports," Computational Methods in Social Sciences (CMSS), "Nicolae Titulescu" University of Bucharest, Faculty of Economic Sciences, vol. 5(2), pages 41-48, December.

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    More about this item

    Keywords

    Exports; growth; granger causality; cointegration.;
    All these keywords.

    JEL classification:

    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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