The success of export led growth strategy depends on level of specialization in production of goo... more The success of export led growth strategy depends on level of specialization in production of goods having comparative advantage. Those economies, which competitively develop its production side, observe significant economic prosperity. The protective policies resulted in destruction of competitiveness, which in turn resulted in significant distortion of trade and economic growth during post liberalization era. Therefore, this study examined the causality between export and economic growth in Nigeria. To achieve this, the cointegration approach was adopted using Unit root Test, Johansen Cointegration and Error Correction Mechanism as well as Granger causality Test. The Augmented Dickey Fuller test shows that the variables are non-stationary but are differenced stationary at their first difference. The Johansen cointegration test shows that there is a direct relationship between non oil export, oil export and economic growth and that total export has positive relationship with growth which conform to theory since no country can be an island of itself. The error correction mechanism shows that the speed of adjustment is 16% which means that the speed of adjustment is low. Granger causality test showed a unidirectional causality from GDP to total export at 5% level of significance. It was therefore recommended among others that trade policies in favour of export expansion should be encouraged because exports are a driver of economic growth. The nominal exchange rate also revealed itself as a strategic and versatile variable for influencing economic growth. Keywords: Import, export, trade, economic growth and cointegration approach, causality, Export-Led-Growth
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Papers by AYEBO MATTHEW
Keywords: Import, export, trade, economic growth and cointegration approach, causality, Export-Led-Growth