TRADE OPENESS AND OUTPUT GROWTH IN NIGERIA: AN ECONOMETRIC ANALYSIS (1970-2007)

ABSTRACT
This research work studies the international competitiveness of the Nigerian economy in the global market by analyzing the relationship between trade openness and output growth in Nigeria. Using time-series data over the period 1970-2007, we show that output growth of the Nigeria economy is a function of two sets of shocks; (i) external shocks (openness and real exchange rate) and (ii) internal shocks (real interest rate and unemployment rate).
A non-monotonic and an ANCOVA econometric models are postulated in  order to capture the structural pattern of the relationship between openness and output growth as well as the policy effect of structural Adjustment program (SAP). The result shows that there is an inverted U-shape (no-monotonic) relationship between openness and output growth in Nigeria and the optimum degree of openness for the economy is estimated to be about 67%. Also, the liberalization policy of the SAP has positive economic effect on the output growth. The ECM reveals that 79% of the equilibrium error is being corrected in the next period. We concluded that unbridled openness may have deleterious effect on the real growth of output of the Nigerian economy.

TABLE OF CONTENTS
Title page                                                                                         
Approval page                                                                                         
Dedication                                                                                        
Acknowledgement                                                                            
Abstract                                                                                           
Table of contents                                                                             
List of tables and figures                                                                     
CHAPTER ONE: INTRODUCTION
1.1     Background of study                                                              
1.1.2  Trade openness and output growth                               
Historical Experience of the Nigeria economy              

CHAPTER TWO: LITERATURE REVIEW

2.1.2 Theory of customs union and free trade areas                        
2.1.3Models of export-led growth                                           

CHAPTER THREE: METHODOLOGY 

        3.2.1 Test of stationarity                                                         
3.2.2 Test of co integration                                                                
3.2.3 Error correction model                                                    
3.3     Justification of the model                                                           
3.4     Estimation techniques                                                            
3.5     Evaluation Procedure                                                             
3.5.1 Economic test (a priori expectation)                               
3.5.2 Statistical (first order) test                                                        
3.5.3 Econometric (second order) test                                               
3.6     Sources of data and software for estimation                                
CHAPTER FOUR: PRESENTATION AND ANALYSIS OF RESULTS

4.2.1Test of stationarity                                                                  
4.2.2 Test of co integration                                                                
4.2.3 The Error correction model (ECM)                                 

4.3.1Evaluation based on economic criteria                                     
4.3.2Evaluation based on statistical criteria                                     
4.3.3 Evaluation based on econometric criteria                      

CHAPTER FIVE: SUMMARY, POLICY PRESCRIPTION
AND CONCLUSION 

APENDIX                                                                     I       
APENDIX                                                                     II
APENDIX                                                                     III (A)
APENDIX                                                                     III (B)
APENDIX                                                                     III(C)
APENDIX                                                                     III (D)
APENDIX                                                                     III (E)
APENDIX                                                                     III (F)
APENDIX                                                                       IV
APENDIX                                                                       V
APENDIX                                                                      VI    
APENDIX                                                                      VII
APENDIX                                                                      VIII 
APENDIX                                                                       IX
APENDIX                                                                       X
APENDIX                                                                       XI
APENDIX                                                                       XII

LIST OF TABLES AND FIGURES
Figure 1:     Growth Rate of Real GDP
Figure 2: Trend of Real GDP
Figure 3: Growth of Export and Import
Figure 4: The Degree of Openness
Table 1: Openness Indicators
Table 2: A Priori Expectation
Table 3: Results of Model 1
Table 4: Results of Model 2
Table 5: Results of Stationarity test
Table 6: Results of Co integration test
Table 7: Results of the Error Correction Model
Figure 5: Non- Monotonic Relationship between TPN and  RGDP
Table 8: Summary of the T-Test
Table 9: Pair-Wise Correlation Matrix