Original Research

Trade openness and economic growth in Nigeria: Further evidence on the causality issue

SM Olufemi
South African Journal of Economic and Management Sciences | Vol 7, No 2 | a1375 | DOI: https://doi.org/10.4102/sajems.v7i2.1375 | © 2004 SM Olufemi | This work is licensed under CC Attribution 4.0
Submitted: 27 April 2004 | Published: 28 April 2004

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SM Olufemi, Obafemi Awolowo University, Nigeria

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Abstract

The study specifically investigated the causality between the openness variable and economic growth, using data from the Nigerian economy. Previous studies in Nigeria have interpreted the regression results of output variables on the export trade variable as providing support for trade liberalization as engine for growth with less emphasis on other measures like import. Such an interpretation is questionable, since these regressions provided no means for determining the direction of causality. This paper performed causality tests with various forms of openness measures and economic growth. The results indicated a uni-directional relationship between openness and growth. This shows that an increasing level of openness will be beneficial, depending on the level of economic development in Nigeria. The result is robust across different measures of openness and analytical techniques.

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