Tripartite relationship between FDI, trade openness and economic growth amidst global economic crisis in Nigeria: application of combined cointegration and augmented ARDL analysis
Abstract There is general consensuses among scholars on the importance of international trade and foreign direct investment as a main macroeconomic variables that drive economic growth of developing countries. However, the global economic crisis plays dominant role in determining the movement of the...
| Main Authors: | , , , |
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| Format: | Article |
| Language: | English |
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SpringerOpen
2022-04-01
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| Series: | Future Business Journal |
| Subjects: | |
| Online Access: | https://doi.org/10.1186/s43093-022-00116-w |
| _version_ | 1797669565761585152 |
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| author | Kingsley Ikechukwu Okere Obumneke Bob Muoneke Favour Chidinma Onuoha Philip C. Omoke |
| author_facet | Kingsley Ikechukwu Okere Obumneke Bob Muoneke Favour Chidinma Onuoha Philip C. Omoke |
| author_sort | Kingsley Ikechukwu Okere |
| collection | DOAJ |
| description | Abstract There is general consensuses among scholars on the importance of international trade and foreign direct investment as a main macroeconomic variables that drive economic growth of developing countries. However, the global economic crisis plays dominant role in determining the movement of these macroeconomic variables that can change the nomenclature of economic activities in relation with trade and FDI inflow. For this purpose, this study investigates the relationship between trade openness, FDI inflow and economic growth of Nigeria by accounting for the effects of global economic crisis of 2007–2008 and commodity crisis of 2016 using Bayer and Hanck (in J Time Ser Anal 34(1):83–95, 2013) approach to cointegration and augmented autoregressive distributed lag (AARDL) method on time series data from 1982 to 2018. The results provide evidence that (1) global economic crisis significantly dampens economic growth. (2) The negative interaction of total trade, FDI and global financial economic crisis is substantive enough to dampen the trade-growth and FDI-growth led relationship. (3) The negative interaction of FDI-inflow with global economic crisis is more pronounced and substantive in the long run than the short run. This study recommends for policy option positioned towards escalating specific fiscal measure that should provide a sound legislative rules and reductions in taxes for international investors; stimulus measures targeting measures to control public spending, which had previously fuelled economic expansion. |
| first_indexed | 2024-03-11T20:46:16Z |
| format | Article |
| id | doaj.art-4ed713adb6194d97ab9401310b0e2eed |
| institution | Directory Open Access Journal |
| issn | 2314-7210 |
| language | English |
| last_indexed | 2024-03-11T20:46:16Z |
| publishDate | 2022-04-01 |
| publisher | SpringerOpen |
| record_format | Article |
| series | Future Business Journal |
| spelling | doaj.art-4ed713adb6194d97ab9401310b0e2eed2023-10-01T11:17:09ZengSpringerOpenFuture Business Journal2314-72102022-04-018112310.1186/s43093-022-00116-wTripartite relationship between FDI, trade openness and economic growth amidst global economic crisis in Nigeria: application of combined cointegration and augmented ARDL analysisKingsley Ikechukwu Okere0Obumneke Bob Muoneke1Favour Chidinma Onuoha2Philip C. Omoke3Department of Economics, Banking and Finance, Gregory UniversityDepartment of Finance, University of LagosDepartment of Economics, Evangel UniversityDepartment of Economics and Development Studies, Alex Ekwueme Federal UniversityAbstract There is general consensuses among scholars on the importance of international trade and foreign direct investment as a main macroeconomic variables that drive economic growth of developing countries. However, the global economic crisis plays dominant role in determining the movement of these macroeconomic variables that can change the nomenclature of economic activities in relation with trade and FDI inflow. For this purpose, this study investigates the relationship between trade openness, FDI inflow and economic growth of Nigeria by accounting for the effects of global economic crisis of 2007–2008 and commodity crisis of 2016 using Bayer and Hanck (in J Time Ser Anal 34(1):83–95, 2013) approach to cointegration and augmented autoregressive distributed lag (AARDL) method on time series data from 1982 to 2018. The results provide evidence that (1) global economic crisis significantly dampens economic growth. (2) The negative interaction of total trade, FDI and global financial economic crisis is substantive enough to dampen the trade-growth and FDI-growth led relationship. (3) The negative interaction of FDI-inflow with global economic crisis is more pronounced and substantive in the long run than the short run. This study recommends for policy option positioned towards escalating specific fiscal measure that should provide a sound legislative rules and reductions in taxes for international investors; stimulus measures targeting measures to control public spending, which had previously fuelled economic expansion.https://doi.org/10.1186/s43093-022-00116-wTrade opennessFDI inflowEconomic crisisARDLBayer and HanckNigeria |
| spellingShingle | Kingsley Ikechukwu Okere Obumneke Bob Muoneke Favour Chidinma Onuoha Philip C. Omoke Tripartite relationship between FDI, trade openness and economic growth amidst global economic crisis in Nigeria: application of combined cointegration and augmented ARDL analysis Future Business Journal Trade openness FDI inflow Economic crisis ARDL Bayer and Hanck Nigeria |
| title | Tripartite relationship between FDI, trade openness and economic growth amidst global economic crisis in Nigeria: application of combined cointegration and augmented ARDL analysis |
| title_full | Tripartite relationship between FDI, trade openness and economic growth amidst global economic crisis in Nigeria: application of combined cointegration and augmented ARDL analysis |
| title_fullStr | Tripartite relationship between FDI, trade openness and economic growth amidst global economic crisis in Nigeria: application of combined cointegration and augmented ARDL analysis |
| title_full_unstemmed | Tripartite relationship between FDI, trade openness and economic growth amidst global economic crisis in Nigeria: application of combined cointegration and augmented ARDL analysis |
| title_short | Tripartite relationship between FDI, trade openness and economic growth amidst global economic crisis in Nigeria: application of combined cointegration and augmented ARDL analysis |
| title_sort | tripartite relationship between fdi trade openness and economic growth amidst global economic crisis in nigeria application of combined cointegration and augmented ardl analysis |
| topic | Trade openness FDI inflow Economic crisis ARDL Bayer and Hanck Nigeria |
| url | https://doi.org/10.1186/s43093-022-00116-w |
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