Trade Liberalization and Export Growth: Evidence from BRICS and Nigeria

AFRAG033

Trade Liberalization and Export Growth: Evidence from BRICS and Nigeria

Nnenna G. Nwonye Nnenna.nwonye@unn.edu.ng Department of Banking& Finance, University of Nigeria Enugu Campus.

Ogochukwu Chinelo Okanya ookanya@imt.edu.ng

Department of Banking and Finance, Institute of Management and Technology Enugu

Abstract

This study investigates the impact of trade liberalization on export growth with reference to BRICS member countries and Nigeria, using times series data that span the periods 2000 to 2019. Adopting the dynamic panel ARDL techniques, the study estimated for mean group, pooled mean group and dynamic fixed effect. From the Hausman test result, pooled mean group is the most suitable and efficient estimator for the study. The evidence from the empirical findings shows that removal of trade restrictions or other trade barriers significantly influence export growth in BRICS and Nigeria. Thus, suggesting that

trade openness significantly promotes export growth. Further investigation revealed total trade ratio to be significantly and positively related to export growth, while inflation and exchange rate negatively impacted export growth. Further insight on the country specific investigation showed that trade liberalization significantly promotes export growth in Brazil, India, South Africa and Nigeria, while it was observed to be negatively related to export growth in China and Russia. These results could be as a result of heterogeneous nature of the individual countries and the nature of data set. Though, we expected a positive relationship between trade liberalization and export growth in China. In addition, we also observed an existence of long run relationship between trade liberalization and export growth in the panel, as well as the individual countries with a deferring speed of adjustment. Hence, from the study’s findings, we suggest that BRICS and Nigeria should initiate trade policies that could further promote export growth. In turn, this will promote increase in foreign reserve of the countries.

Keywords: Trade Liberalization, Trade barriers, Export Growth, BRICS

Jel Classification: F10, F19

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