The Impact of Export and Import on Economic Growth in Nigeria: Evidence from VAR Approach

  • Raymond Rahaj Adegboyega Olabisi Onabanjo University, Nigeria

Abstract

AbstractThe paper examines the impact of import and export on economic growth in Nigeria using Vector Autoregressive (VARs) technique through various types of structural analysis of Granger causality tests, impulse response functions, and forecast error variance decompositions to examine the dynamic effects of various shocks on macroeconomic variables. The results of VAR show that the predominant sources of Nigeria economic growth variation are due largely to “own shocks” and import-export trade innovations. While Johansen Cointegration results showed that there is a stable, long- run relationship between import-export and economic growth, but the magnitude is minimal. In conclusion, the study agreed that government should always embark on policies that will encourage exports with proper implementation of import control measures. KeywordsImport, export, economic growth, exchange rate, inflation rate

References

References
Adesuyi, O.O. and Odeloye, O.D. (2013) Foreign Trade and Economic Growth in Nigeria (1980-2010). Journal of Economics and Sustainable
Development, 4(13): 73-88.

Albiman, M. and Suleiman, N.N. (2016) The Relationship among Export,
Import, Capital Formation and Economic Growth in Malaysia. Journal of
Global Economics, 4(2): 2375-4389. http://dx.doi.org/10.4172/23754389.1
000186.

Ajayi, S.I. (1995) “Econometric Analysis of Imports Demand Function for
Nigeria.” The Nigerian Journal of Economics and Social Studies (NJESS),
17: 67- 91.

Arodoye, N.L. and Iyoha, M.A. (2014) Foreign Trade-Economic Growth
Nexus: Evidence from Nigeria. CBN Journal of Applied Statistics, 5(1):
121-141.

Bond, M.E. (1995) “Exports Demand and Supply for Group of Non-oil
Developing Countries.” IMF Staff Papers, 15(2): 75–91.

CBN (2014) Annual Report and Statistical Bulletin.
Darrat, A. (1987) Are Exports an Engine of Growth? Applied Economic, 19(2): 277-283.

Export Import Bank (2009) Nigeria: Brief Profile, Export Import Bank.
Retrieved from http://www.gnexid. org/country/Nigeria.pdf, (Accessed on:
23 July, 2010).

Goldar, B.N. and Bharadwa, R.N. (1985) “Determinants of Iron and Steel
Exports.” The Developing Economies, XXIII(1).

Goldstein, M. and Khan, M.S. (1998) “Supply and Demand for Exports: A
Simultaneous Approach.” Review of Economics and Statistics, 60(2): 3250.

Goldstein, M. and Khan, M.S. (1998) “Income and Price Effects in Foreign
Trade.” In R.W. Jones and P.B. Kenen (Eds.), Handbook of International
Economics, II: 1041-1105, Elsevier Science Publishers B.V.

Hashim, K. and Masih, M. (2014) What causes economic growth in Malaysia: exports or imports? Munich Personal RePEc Archive (MPRA), INCEIF, Malaysia, 14 August.

Khan, M.S. and Ross, K.Z. (1997) “Cyclical and Secular Income Elasticities of the Demand for Imports.” Review of Economics and Statistics, 19(6): 42–60.

Kruger, A.O. and Ito, T. (1995) Growth theories in light of East Asian
Experience. London: University of Chicago Press.

Langley, K.M. (1968) The External Reserve Factor in Nigerian Economic
Development. The Journal of Economic and Social Studies, 10(6): 151.

Magee, S.P. (1995) “Income and price elasticities in world trade.” Review of
Economics and Statistics, 51(4): 111-125.

Mankiw, G.N., Romer, D. and Weil, D.N. (1992) A contribution to the
empirics of economic growth. Quarterly Journal of Economics, 107(2):
407–437.

Mohamed, M.R., Liew, C. and Mzee, S.S. (2012) Export Trade and Economic
Growth in Tanzania: A Disaggregated Approach.

Moran, R.S. (1999) Structure of Nigerian Economy. Owerri: Springfield
Publishers.

NTJ (1967) Oil Palm Industry in Nigeria. The Nigerian Trade Journal, 16(2):
53.

Ojo, O.O. (1987) An Empirical Investigation of Capital Flight in Selected
African Countriesí, Abidjan African Development Bank, Economic
Research Papers, No. 17.


Onitiri, H.M.A. (1981) The Marketing Board System: Proceedings of an
International Conference, Nigerian Institute of Social and Economic
Research, Ibadan, Nigeria.

Oyejide, T.A., Ogunkola, E.O. and Ndungu, N.S. (2001) Trade, investment
growth in Africa: Patterns, trends and puzzles. A report submitted to the
African Economic Research Consortium, Nairobi, Kenya.

Omoke, P.C. and Ugwuanyi, C.U. (2010) Export, Domestic Demand and
Economic Growth in Nigeria: Granger Causality Analysis. European
Journal of Social Sciences, 13(2): 211-218.

Ricardo, D. (1817) Principles of Political Economy and Taxation, 1821.
Library of Economics and Liberty. 9 July 2016. .

Safdari, M., Mehrizi, M.A. and Dehqan-Niri, M.R. (2012) The Relationship
between Foreign Trade and Economic Growth in Iran. American Journal
of Scientific Research, 6(4): 110-131.

Sims, C.A. (1986) Are Forecasting Models Usable for Policy Analysis?
Federal Reserve Bank of Minneapolis Quarterly Review. 10(4): 2-16,
(Winter 1986).

Sun, P. and Heshmati, H. (2010) International Trade and its Effects on
Economic Growth in China, IZA DP Discussion Paper No. 5151, August.
Thursby, J. and Thursby, M. (1994) “How Reliable are Simple, Single
Equation Specifications of Imports Demand.” Review of Economics and
Statistics, 66(6): 120-128.

Van den Berg, H. and Schmidt, J.R. (1994) Foreign trade and economic
growth: time series evidence from Latin America. Journal of International
Trade and Economic Development, 3(7): 121
Published
2017-12-10