ECONOMIC GLOBALIZATION AND ECONOMIC GROWTH IN THE DEVELOPING ECONOMIES: A CASE OF NIGERIAN ECONOMY

Abstract

This study examines the impact of economic globalization on output growth of the Nigerian economy. Different econometrics techniques i.e. pre-estimation test, estimation techniques and diagnostic test such as Augment Dickey Fuller, Engel-Granger co-integration, Ordinary Least square, post estimation tests and Error Correction Model were carried out using the data sets within the period of 1970 and 2013. There exist a long-run relationship among exchange rate, interest rate, inflation rate, foreign direct investment (FDI), trade openness, and financial openness and real gross domestic product. The results revealed that a higher exchange rate and inflation rate, an increase in foreign direct investment, growth in trade and financial openness and a lesser interest rate enhance the growth rate of output in Nigeria. However, all the incorporated variables maintained their respective signs and significant level except FDI with a negative insignificant impact on output growth. In addition, 32.2% of the distortion in the shortrun is corrected in the first year in attainting equilibrium or sustainable economic growth. The government must ensure the development and enthronement of necessary institutions that will support both market system and democracy.