The Export-Led Growth Nexus in an Oil-Dominant Economy: Aggregated and Disaggregated Analysis

Udi Joshua; Afolabi Lukman Olajide; Selim Gündüz; Seyma Caliskan Cavdar; Zekeriya Sahin; Festus Victor Bekun

doi:10.32479/ijefi.20974

Authors

Udi Joshua Department of Economics, Federal University Lokoja, Kogi State, Nigeria
Afolabi Lukman Olajide Department of Economics and Research, Foremost Capital Limited, Plot 72 Ahmadu Bello Way, Central Business District Abuja, Nigeria
Selim Gündüz Department of Business Administration, Faculty of Economics, Administrative and Social Sciences, Adana Alparslan Türkeş Science and Technology University, Adana, Turkiye
Seyma Caliskan Cavdar Department of Economics, Faculty of Economics and Administrative Sciences, Dogus University, Istanbul, Turkiye
Zekeriya Sahin Business Program, Faculty of Business and Management Sciences, Istanbul Esenyurt University, Istanbul, Turkiye
Festus Victor Bekun Faculty of Economics Administrative and Social Sciences, Istanbul Gelisim University, Istanbul, Turkiye; & VIZJA University, Warsaw, Poland

DOI:

https://doi.org/10.32479/ijefi.20974

Keywords:

Economic Growth, Export, Import, Foreign Direct Investment, Domestic Savings, Nigeria

Abstract

The Keynesian theory of national income asserts that an increase in exports will enhance output performance significantly. Standing on this premise, this study seeks to validate the reality of export-led growth hypothesis in Nigeria by disaggregating export into oil and non-oil exports. Using Auto regressive distributed lag (ARDL) method to estimate time series data from 1981 to 2019. Empirical finding reveals evidence of export-led growth nexus for both the aggregated and disaggregated exports. Further results prove the existence of FDI-led growth nexus as well as saving-induced growth hypothesis. In contrast, import demonstrates a harmful relationship with economic growth. Thus, this study recommends an expansion of the export base of the country, particularly the non-oil sector, to enable her generate more foreign earnings. Domestic saving should be encouraged to improve the availability of investment funds for business expansion. A critical suggestion is made for the government to curtail importation especially for goods with domestic substitutes.