Capital Inflow and Economic Growth Nexus in Nigeria: The Role of Trade Openness
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Date
2014
Authors
Saibu, O.M.
Journal Title
Journal ISSN
Volume Title
Publisher
ACTA UNIVERSITATIS DANUBIUS
Abstract
The paper examined the effects of capital inflow on economic growth and also investigatedthe role of trade openness in foreign capital inflow/growth nexus in Nigeria. This is with a view totesting modernization hypothesis in Nigeria. The paper adopted the Principal Component Analysis(PCA) technique to derive a unique index that captures the quantity and quality of the conventionalmeasures of capital inflow along with trade openness. The method has been used in other studies butnot yet applied to capital inflow versus growth analysis. The time series properties of the data were
examined and Autoregressive Distributed Lag (ARDL) bound testing methodology was used to
analyze the time-series data. The result showed that capital inflow when interacted with trade
openness had a significant impact on growth, thus providing empirical support for the modernization
hypothesis that capital inflow and trade policy are complementary and growth-enhancing. The paper
concluded that trade liberalization policies tend to enhance the effectiveness of capital inflow and jointly
promote higher economic growth in Nigeria.
Description
Scholarly articles
Keywords
Liberalization policy , Modernization hypothesis , Groth factor analysis , Growth nexus , Research Subject Categories::SOCIAL SCIENCES
Citation
Saibu O M (2014) Capital Inflow and Economic Growth Nexus in Nigeria: The Role of Trade Openness ACTA UNIVERSITATIS DANUBIUS Vol 10, no 6, 2014, Pp 98-112