Empirical investigation on Effect of Globalization and Trade Liberalization on the Nigerian Labour Market

Justin C. Alugbuo and Sebastian O. Uremadu 2*
1 Lecturer, Department of Economics, College of Management Sciences (COLMAS), Michael
Okpara University of Agriculture, Umudike, Abia State, Nigeria. Email: jc.alugbuo@mouau.edu.ng
2 Professor of Banking, Department of Banking & Finance, College of Management Sciences
(COLMAS), Michael Okpara University of Agriculture, Umudike, Abia State, Nigeria. Email:
sebauremadu@yahoo.com

While some scholars believe that globalization translates into substantial job creation in
developing countries, others believe that it leads to job loss and it is against this backdrop, that
this study investigated effect of globalization and trade liberalization on labour market in Nigeria
for the period 1981-2019 with the help of the ARDL estimation technique to determine effect of
globalization and trade liberalization on labour market in Nigeria. Results showed that foreign
direct investment inflows had a positive relationship with labour market in the short and long run
period in Nigeria, gross fixed capital formation percentage contribution of GDP had a weak
positive relationship with labour market in the short run and insignificantly influenced labour
market in the long run at 5% level of significance, where the result of toda and yamamoto granger
causality test indicated a uni-directional causality between total labour force and gross fixed
capital formation in Nigeria. Based on these findings, the study recommended that, Nigeria as a
developing nation, should develop its own domestic technology in order to reap the full benefits of
globalization and to prevent macroeconomic volatilities and must liberalize their short-term
capital movements gradually in order for globalization to succeed.
Keywords: Globalization; Trade Liberalization; Labour Market; labour Force.

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