AN ANALYSIS OF THE IMPACTS OF TRADE OPENNESS ON NIGERIAN ECONOMIC GROWTH

Abstract

This study evaluated the impacts of trade openness on economic growth in Nigeria using relevant data from publications of the Central Bank of Nigeria (CBN) Statistical Bulletins and National Bureau of Statistics (NBS). The data covered a 40-year period between 1971 and 2010. Multiple regression analysis technique (Ordinary Least Square (OLS) method) was used to analyse the relationship between the dependent variable (Gross Domestic Product) and independent variables (FDI, external debt, degree of openness, export and import). The coefficient of determination (R2 ) to the tune of 86.3% (approximately 86%) supported by high value of adjusted R2 which stood at 0.8381 (83.8%) connoting that the independent variables incorporated into this model have been able to determine variation of Gross Domestic Product (GDP) to the tune 83.8%. Also, F probability statistics also confirmed the significance of the model. Likewise, findings to establish a long run association between dependent and independent variables indicated that trade openness had positive impact on Gross Domestic Products in the long run where the coefficient of multiple determinations (R2 ) of 0.9290 or 93 percent variation in the observed behaviour in the GDP is jointly explained by the independent variables. In view of the these, all the components of international trade forming independent variables of the study should be accurately managed so that their importance could be continually felt in the Nigerian Gross Domestic Product positively.