Impact of Export Diversification on Economic Growth: Evidence from Nigeria.

What is it about?

Exports diversification is a crucial aspect of the development process that has been viewed by experts in development economics as a potential engine that can help Low-income Countries (LICs) to enhance their macroeconomic performance, achieve higher income, sustain national competitive advantage, enhance macroeconomic stability, accelerate and sustain economic growth, reduce the deterioration of terms of trade, reduce the degree of vulnerability to external shocks, reduce dependence on primary products, acquire new technology, create new industries through backward and forward linkages that results from export diversification production and motivation for improving the composition of exports. The successful economic experiences of East Asian countries, such as China, Korea, and Taiwan replicate these submissions The study examined the impact of export diversification on economic growth in Nigeria. We were able to show the short-run and long-run impacts of export diversification on economic growth in Nigeria.

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Why is it important?

The study employed the Auto-regressive Distributed Lag (ARDL) bound testing approach to cointegration as a methodology to control for endogeneity. The results showed that export diversification had a positive and insignificant relationship with economic growth in Nigeria. The findings had important policy implications for economic policy and recommends that constructive attention should be given to exports of primary products which have persistently suffered from declining terms of trade in order to enhance economic growth.

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