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.


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

Statement of the research problem                                  

Objectives of the study                                                   

Statement of the research hypothesis                              

Justification of the Study                                                 

Significance of the Study                                                

Scope and limitation of the study                                   


Theoretical literature                                                      

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

Empirical literature                                                         

Limitation of previous studies                                         


Analytical framework                                                      

Model specification                                                       

        3.2.1 Test of stationarity                                                          3.2.2 Test of cointegration                                                                 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


Presentations of regression results                                 

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

Interpretation and Evaluation of result                              

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

Evaluation of the working Hypotheses                             



Policy Recommendations                                              

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





The current period in the world economy is regarded as period of globalization and trade liberalization. In this period, one the crucial issues in development and international economics is to know whether trade openness indeed promotes growth. With globalization, two major trends are noticeable: first is the emergence of multinational firms with strong presence in different, strategically located markets; and secondly, convergence of consumer tastes for the most competitive products, irrespective of where they are made. In this context of the world as a “global village”, regional integration constitutes an effective means of not only improving the level of participation of countries in the sub-region in world trade, but also their integration into the borderless and interlinked global economy. (NEEDS, 2005).

Since 1950, the world economy has experienced a massive liberalization of world trade, initially under the auspices of the General Agreement on Tariffs and trade (GATT), established in 1947, and currently under the auspices of the World Trade Organization (WTO) which replaced the GATT in 1993. Tariff levels in both developed and developing countries have reduced drastically, averaging approximately 4% and 20% respectively, even though the latter is relatively high. Also, non-tariff barriers to trade, such as quotas, licences and technical specifications, are also being gradually dismantled, but at a slower rate when compared with tariffs.

The liberalization of trade has led to a massive expansion in the growth of world trade relative to world output. While world output (or GDP) has expanded fivefold, the volume of world trade has grown 16 times at average compound rate of just over 7% per annum. In fact, it is difficult, if not impossible, to understand the growth and development process of countries without reference to their trading performance. (Thirlwall, 2000).

Likewise, Fontagné and Mimouni (2000) noted that since the end of the European recovery after World War II, tariff rates have been divided by 10 at the world level, international trade has been multiplied by 17, world income has quadrupled, and income per capita has doubled. Incidentally, it is well known that periods of openness have generally been associated with prosperity, whereas protectionism has been the companion of recessions. In addition, the trade performance of individual countries tends to be good indicator of economic performance since well performing countries tend to record higher rates of GDP growth. In total, there is a common perception that even if imperfect competition and second best situations offer the possibility of welfare improving trade policies, on average free trade is better than no trade.

From the ongoing discussion, it is evident that trade is very important in promoting and sustaining the growth and development of an economy. No economy can isolate itself from trading with the rest of the world because trade act as a catalyst of growth. Thus Nigeria, being part of the world, is no exemption. For this reason, there is a need to thoroughly examine the nature of relationship between trade openness and output growth in Nigeria.


There are problems associated with the development of the Nigerian economy in her different sectors based on liberation of trade. These problems may be economic problems based on the rate of instability, policy barriers to capital flows, inappropriate economic policies and political instabilities. There may also be problems like market liquidity. In using liquidity as a measure of stock market development, it seems that the Nigerian capital market is illiquid to an extent and it has contributed very little to the growth of the Nigerian economy (Ibrahim, 2002).

Therefore, this research work shall answer the following questions

1. Does trade openness produce a rapid flow of foreign capital for the Nigerian economy?

2. Does trade openness significantly improve management techniques for firms operating in Nigeria?

3. To what extent has globalization brought about an advancement of new technologies in the Nigerian economy?


The broad objective of this research work is to study, in its entirely, the relationship between trade openness and output growth in Nigeria. This broad objective can be subdivided into the following smaller objectives:

⦁ To examine the impact of trade openness on output growth in Nigeria.

⦁ To identify other internal and external macroeconomic shocks that determine output growth in Nigeria.

⦁ To identify other international and external macro economic shocks that determine output growth in Nigeria.

⦁ To determine the linear association (correlation) between trade openness and output growth in Nigeria.

⦁ To ascertain the possibility of long run relationship between trade openness and output growth in Nigeria.

⦁ To determine the possibility of structural changes (if any) in output growth between the pre-SAP and post-SAP period.


In view of the foregoing study, with respect to trade openness and output growth in Nigeria, the following null hypothesis will be tested:

Ho: Trade openness does not have any significant impact on output growth in Nigeria.

Ho: There is no other macroeconomic variable (internal and external) that have significant impact on output growth in Nigeria.

Ho: There is no linear association (correlation) between trade openness and output growth in Nigeria.

Ho: There is no long run relationship between trade openness and output growth in Nigeria.

Ho: There is no significant structural change in output growth between the pre-SAP and post-SAP period.


Nigeria is currently undergoing a series of transformation in every sector of the economy, including the external sector of the economy. The country’s economic policy in the last two decades had one dominating theme which is an integral part of the structural Adjustment programme (SAP) – trade liberalization. This policy was espoused on the argument that it enhances the welfare of consumers and reduces poverty as it offers wider platform for choice from among wider variety of quality goods and cheaper imports. Today, there are many existing literature on the topical issue of trade openness and growth of which some support the axiom that openness is directly correlated to greater economic growth with the main operational implication being that governments should dismantle the barriers to trade. The focal point of this research work is to identify the short comings and benefits of this argument as well as check the validity of this mainstream axiom I Nigeria in the presence of various internal and external shocks. 


The role of international trade in the developmental journey of an economy can not be over emphasized, especially with the current trend of globalization. Nigeria. Being part of the global village, is not left out of this world development. This research work is carried out to study how trade openness has influenced the performance of the Nigeria economy through output growth in the presence of other internal and external shocks. The findings of this research work transcend beyond mere academic brainstorming, but will be of immense benefit to federal agencies, policy makers, intellectual researcher and international trade think tanks that occasionally prescribe and suggest policy options to the government on trade related issues. It will also help the government to see the effectiveness of trade liberalization policy on the economic growth of the nation over the years. This research work will further serve as a guide and provide insight for future research on this topic and related field for students who are willing to improve it. It will also educate the public on various government policies as related to trade issues. 


This research work span through the period of 1970-2007 (38 years), and is within the geographical zone of Nigeria. Thus, it is a country-specific research. This research exercise, like every other research work, is really a rigorous one that consumes much time and energy especially in the area of data sourcing, data computation and modeling. This work is relatively limited base on time and financial constraints, data availability precision of data and data range, and methodology adopted which could further be verified by future research. Nevertheless, the researchers have properly organized the research so as to present dependable results which can aid effective policy making and implementation at least for the time being.                                                       



RESEARCHWAP.COM is an online repository for free project topics and research materials, articles and custom writing of research works. We’re an online resource centre that provides a vast database for students to access numerous research project topics and materials. guides and assist Postgraduate, Undergraduate and Final Year Students with well researched and quality project topics, topic ideas, research guides and project materials. We’re reliable and trustworthy, and we really understand what is called “time factor”, that is why we’ve simplified the process so that students can get their research projects ready on time. Our platform provides more educational services, such as hiring a writer, research analysis, and software for computer science research and we also seriously adhere to a timely delivery.


Please feel free to carefully review some written and captured responses from our satisfied clients.

  • "Exceptionally outstanding. Highly recommend for all who wish to have effective and excellent project defence. Easily Accessable, Affordable, Effective and effective."

    Debby Henry George, Massachusetts Institute of Technology (MIT), Cambridge, USA.
  • "I saw this website on facebook page and I did not even bother since I was in a hurry to complete my project. But I am totally amazed that when I visited the website and saw the topic I was looking for and I decided to give a try and now I have received it within an hour after ordering the material. Am grateful guys!"

    Hilary Yusuf, United States International University Africa, Nairobi, Kenya.
  • " is a website I recommend to all student and researchers within and outside the country. The web owners are doing great job and I appreciate them for that. Once again, thank you very much "" and God bless you and your business! ."

    Debby Henry George, Massachusetts Institute of Technology (MIT), Cambridge, USA.
  • "I love what you guys are doing, your material guided me well through my research. Thank you for helping me achieve academic success."

    Sampson, University of Nigeria, Nsukka.
  • " is God-sent! I got good grades in my seminar and project with the help of your service, thank you soooooo much."

    Cynthia, Akwa Ibom State University .
  • "Great User Experience, Nice flows and Superb functionalities.The app is indeed a great tech innovation for greasing the wheels of final year, research and other pedagogical related project works. A trial would definitely convince you."

    Lamilare Valentine, Kwame Nkrumah University, Kumasi, Ghana.
  • "Sorry, it was in my spam folder all along, I should have looked it up properly first. Please keep up the good work, your team is quite commited. Am grateful...I will certainly refer my friends too."

    Elizabeth, Obafemi Awolowo University
  • "Am happy the defense went well, thanks to your articles. I may not be able to express how grateful I am for all your assistance, but on my honour, I owe you guys a good number of referrals. Thank you once again."

    Ali Olanrewaju, Lagos State University.
  • "My Dear Researchwap, initially I never believed one can actually do honest business transactions with Nigerians online until i stumbled into your website. You have broken a new legacy of record as far as am concerned. Keep up the good work!"

    Willie Ekereobong, University of Port Harcourt.
  • "WOW, SO IT'S TRUE??!! I can't believe I got this quality work for just 3k...I thought it was scam ooo. I wouldn't mind if it goes for over 5k, its worth it. Thank you!"

    Theressa, Igbinedion University.
  • "I did not see my project topic on your website so I decided to call your customer care number, the attention I got was epic! I got help from the beginning to the end of my project in just 3 days, they even taught me how to defend my project and I got a 'B' at the end. Thank you so much, infact, I owe my graduating well today to you guys...."

    Joseph, Abia state Polytechnic.
  • "My friend told me about ResearchWap website, I doubted her until I saw her receive her full project in less than 15 miniutes, I tried mine too and got it same, right now, am telling everyone in my school about, no one has to suffer any more writing their project. Thank you for making life easy for me and my fellow students... Keep up the good work"

    Christiana, Landmark University .
  • "I wish I knew you guys when I wrote my first degree project, it took so much time and effort then. Now, with just a click of a button, I got my complete project in less than 15 minutes. You guys are too amazing!."

    Musa, Federal University of Technology Minna
  • "I was scared at first when I saw your website but I decided to risk my last 3k and surprisingly I got my complete project in my email box instantly. This is so nice!!!."

    Ali Obafemi, Ibrahim Badamasi Babangida University, Niger State.
  • To contribute to our success story, send us a feedback or please kindly call 2348037664978.
    Then your comment and contact will be published here also with your consent.

    Thank you for choosing