Trade Liberalization and Nigeria Industrial Response: An Econometric Analysis
- Davis OJIMA, Ph. D1; Itode James KRAMA, Ph. D2
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DOI: 10.5281/zenodo.16930916
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UKR Journal of Economics, Business and Management (UKRJEBM)
The study empirically investigates the effect of trade liberalization on Nigeria industrial response from 1990 to 2024. It adopted time series methodical approach and obtained data from the Central Bank of Nigeria Statistical Bulletin. The index of Industrial Production was proxy for industrial response as the dependent’s variable vis a vis other explanatory variable in the study. The basis of our data sets is the assessment of long and short-term correlations in the variables utilizing Auto Regressive Distributed Lag and Bounds testing for co-integration. Our data indicate that trade openness in Nigeria positively correlates with industry responsiveness within the short term, and has no effect in the long term. Evidence suggests that foreign direct investment enhances industrial responsiveness within the short term however, the long-term consequences are ambiguous. This holds true in several nations, including Nigeria. The study conclude that trade liberalization increases Industrial Response in the short run but does not enhance Industrial Response in the period the study covers. It recommended that, there should be strong industrial policies to support local manufacturers, infrastructure and technology. Import-substitution for key industries and export diversification beyond crude oil should be in focus.