FINANCIAL DEVELOPMENT, TRADE OPENNESS AND ECONOMIC GROWTH IN NIGERIA
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The study investigates the effect(s) of financial development and trade openness on economic growth in
Nigeria over the period of 1980 – 2017. It made use of empirical data to explore the channels through which
financial development would influence economic growth in Nigeria specifically in the context of international trade
openness and foreign direct investment. The economic model is designed such that it investigates the long run
relationship among the three variables, the Autoregressive Distributed Lag Model (ARDL) Bounds co-integration
approach was adopted for the analysis. Result findings show that there are strong evidences of the long-run
relationship between financial development, Trade Openness and economic growth in Nigeria. The broad money
supply has a positive but insignificant effect on the nation’s Gross Domestic Product in the short run while Credit
to Private Sector ratio has a negative but significant effect on Gross Domestic Product in the short run in Nigeria.
The short run and long run model shows that both the trade Openness policies and financial development policies
are significant variables in the development of the Nigerian economy; this calls for effective policy measures to
address the challenge of economic growth.
Keywords
HB Economic Theory, HJ Public Finance