Journal of Economics and Development Studies

Dynamic Interactions among Trade Openness, Foreign Private Capital Inflows and Economic Growth in Nigeria (1970 – 2014)
Benjamin AyodeleFolorunso (Ph.D.), Akin George Ogunleye (Ph.D, ACIB), Bose Lydia Akanbi

Abstract
The paper examines the current campaigns for increased foreign capital inflows into Africa and greater openness in order to accelerate economic growth in the region. Using Nigerian annual data, the paper determines the validity of the campaigns for proper resolution of the issue. Data were gathered from the various Statistical Bulletins published by the Central bank of Nigeria. Using Granger causality techniques, the paper confirms that the level of foreign capital inflows caused economic growth while trade openness was caused prior by the level of economic growth. This result indicates that trade openness had not caused economic growth in the country. The result also shows that foreign private capital inflows and all its components had not Granger-caused trade openness while causality runs from trade openness to foreign private capital inflows. However, the results of the error correction models revealed that both trade openness and all components of foreign capital inflows have long run positive effect on economic growth in Nigeria. The paper opines that increased foreign private capital inflows would only be necessary for the Nigerian economy provided such capital inflows are made into all sectors of the economy simultaneously.

Full Text: PDF     DOI: 10.15640/jeds.v7n1a2