Analyzing the impact of globalisation on economic development in developing economies: an application of error correction modelling (ECM) to Nigeria

The paper examined the effect of globalization of economic growth in Nigeria. The period of analysis was between 1986 and 2003 while the analytical method employed was econometric techniques of Error Correction Modelling (ECM). The result indicated that both measures of economic integration (trade o...

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Bibliographic Details
Published in:Applied econometrics and international development 2006-09, Vol.6 (3), p.173-182
Main Authors: Feridun, M, Olusi, J O, Folorunso, B A
Format: Article
Language:English
Subjects:
Development economics
Economic impact analysis
Economic integration
Error correction models
Globalization
Nigeria
Open economies
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Summary:The paper examined the effect of globalization of economic growth in Nigeria. The period of analysis was between 1986 and 2003 while the analytical method employed was econometric techniques of Error Correction Modelling (ECM). The result indicated that both measures of economic integration (trade openness and financial integration) and all other orthodox determinants of economic growth such as private investment, public investment and debt series were non stationary. They were indeed I(1) series. The paper also confirmed that trade openness had significant positive effect on economic growth in Nigeria. The impact of financial integration on the economy is, however, negative but insignificant at 10 per cent level of significance. The paper concluded that Nigeria could benefit more from globalization if its economy would fully integrate with the rest of the world. The paper therefore suggested the removal of all barriers to trade and movement of capital. Reprinted by permission of EAAEDS: http://www.usc.es/economet.eaa.htm
ISSN:1578-4487