The Role of International Trade in Growth Accounting: Evidence from Nigeria

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Ogunniyi, M.B.
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West African Journal of Monetary and Economic Integration
The choice of the variable for examining the effect of international trade in growth is based on varying literature. Foreign direct investment is a major channel of growth which has presented a threat to the sustained growth of many economies. This study examines the solow model positive effect as well as economic dependency and the financial contagion adverse effect on both foreign direct investment and international trade in Nigeria. The Data involved in this study are basically drawn from the balance of payment account of the central bank of Nigeria statistical bulletin (2011),of the world development indicators(WDI) and global development finance (GDF) database of the world Bank (2011).using ordinary least square to regress on the Cobb Douglas production function, which is re_fashioned into a log linear specification, we avail the use of proxies for labor and capital and these are the total population and the gross capital formation respectively and these are the control variables. The trade proxies used the total trade and economic openness(which is the ratio of total trade to the gross domestic product (GDP). Our findings show that the effect of international trade on economic growth is significant, also we observe that total trade, economic openness and foreign direct investment have negative effect on the gross domestic product as revealed by the negative elasticity of the gross domestic product while the exchange rate volatility increases with higher levels of natural output. It is recommended that since the structure of the Nigerian Economy clearly reveals increasing openness and integration into the global economy it becomes pertinent not just to harness whatever benefits there are in international trade and finance but also to guard against the often dramatic adverse effects of international trade.
Scholarly articles
International Trade , Foreign Direct Investment , Global development finance , Development indicators , Research Subject Categories::SOCIAL SCIENCES::Business and economics::Economics
Ogunniyi, M.B. (2013). The Role of International Trade in Growth Accounting: Evidence from Nigeria. "West African Journal of Monetary and Economic Integration", Vol 14, No 2.