Shehu Usman Rano, Aliyu (2007): Imports-Exports Demand Functions and Balance of Payments Stability in Nigeria: A Co-integration and Error Correction Modeling. Forthcoming in:
Download (363Kb) | Preview
Abstract This paper assesses the determinants of import and export demand functions. The object is to empirically measure the relative strengths and weaknesses of the determinants import and export, and to examine, using the Marshall-Lerner hypothesis, the condition under which balance of payments adjustment works in the Nigerian economy. The analytical framework employed is an econometric methodology, which encompasses wide a range of tests for stationarity, cointegration and specification of an error correction model. Using data obtained from the Nigerian economy covering the period of 1970 to 2004, result of over-parameterized error correction model show significant causational relationships in the two models. Specifically, from the values of the coefficient of the current and past (lag) level of exchange rate in the two models, the paper knots balance of payments adjustment to regime of exchange rate stability in Nigeria. The paper, therefore, recommends exchange rate adjustment as potent instrument of achieving balance of payments stability in Nigeria.
|Item Type:||MPRA Paper|
|Original Title:||Imports-Exports Demand Functions and Balance of Payments Stability in Nigeria: A Co-integration and Error Correction Modeling|
|Keywords:||Keywords: Imports, exports, stationarity, cointegration, Balance of Payments|
|Subjects:||F - International Economics > F1 - Trade > F10 - General
F - International Economics > F1 - Trade > F14 - Empirical Studies of Trade
|Depositing User:||Usman Rano Aliyu|
|Date Deposited:||11. Sep 2008 05:03|
|Last Modified:||11. Feb 2013 17:52|
Ajakaiye, D. O. (1985) ‘Short-run Effects of Devaluation on Balance of Payments: The Influence of Imports Structures’, The Nigerian Journal of Economics and Social Studies (NJESS), Vol. 27 No.1.
Ajayi, S. I. (1975) ‘Econometric Analysis of Imports Demand Function for Nigeria’ The Nigerian Journal of Economics and Social Studies (NJESS), Vol. 17 No.3
Ali, I. (1987) ‘India’s Manufactured Exports: An Analysis of Factors’ The Developing Economies, Vol. XXV, No. 2
Aliyu, S. R. (2001) ‘Trade Liberalization and Economic Growth in Nigeria: 1970 – 1998’Unpublished PhD. Thesis, Faculty of Social and Management Sciences, Bayero University Kano; Nigeria.
_________. (2005) ‘Identifying Trade Liberalization Regimes in Nigeria: 1970 – 2002), Journal of Social and Management Studies (JOSAMS), Vol. 9, Special Edition, Pp. 29 – 60.
Bond, M. E. (1985) ‘Exports Demand and Supply for Group of Non-oil developing Countries’ IMF Staff Papers, Vol. 15.
Deppler, M. C. and D. M. Ripley (1978) ‘The World Trade Models: Merchandise Trade’ Indian Economic Journal, Vol. 25.
Egwaikhide, F. O. (1999) ‘Determinants of Imports in Nigeria: A dynamic Specification’ African Economic Research Consortium, (AERC) Research Paper, No. 91.
Goldar, B. N. (1989) Determinants of India’s Exports Performance in Engineering Products’, 1960 – 1979, The Developing Economies, Vol. XXVII, No. 1.
Goldar, B. N. and R. N. Bharadwaj (1985) ‘Determinants of Iron and Steel Exports’ The Developing Economies, Vol. XXIII, No. 1
Goldstein, M. and M. S. Khan (1978) ‘Supply and Demand for Exports: A Simultaneous Approach’, Review of Economics and Statistics, Vol. 60, No. 2
Houthakker, H. S. and S. P. Magee (1969) ‘Income and Price Elasticities in World Trade’ Review of Economics and Statistics, Vol. 51.
Iyoha, M. A. (1996) ‘Macroeconomic Policy Management of Nigeria’s External Sector in the Post-SAP Period’, The Nigerian Journal of Economics and Social Studies (NJESS), Vol. 38, No. 1, 2 and 3.
Khan, M. S. (1974) ‘Imports and Exports Demand in Developing Countries’, IMF Staff Working Papers, Vol. 21, No. 3.
Khan, M. S. and K. Z. Ross (1977) ‘Cyclical and Secular Income Elasticities of the Demand for Imports’, Review of Economics and Statistics, Vol. 19.
Learmer, E. E. and R. M. Stern (1970) ‘Quantitative International Economics’, Boston: Allyn and Bacon, Inc.
Maizels, A. (1968) ‘Exports and Economic Growth of Developing Countries’, Cambridge University Press.
Narasimhan, B. & L. Pritchett, (1993) ‘The Evolution of Import Restrictions in Sub- Saharan Africa in the 1980s: an Empirical Analysis’ Working Paper Series, Centre For the Study of African Economies,
Reinhart & Wickham (1994) cited in Edwards, S. (1993), “Openness, Trade Liberalization and Growth in Developing Countries,” Journal of Economic Literature, Vol. 31, Pg. 1358 –1393.
Reinikka, R. (1994), “How to Identify Trade Liberalization Episodes: An Empirical Study on Kenya” Working Paper No. 94.10 Centre for the Study of African Economies, University of Oxford, London.
Rhomberg, R. R. (1968) ‘Transmission of Business Fluctuations from Developed to Developing Countries’, IMF Staff Papers, Vol. 25. Okoh, R. N. (2002) ‘Expanding Nigeria’s Exports Trade Through Globalization: Is it Feasible? The Nigerian Journal of Economics and Social Studies (NJESS), Vol. 44 No. 3.
Olayide, S. O. (1968) ‘Imports demand Model: An Econometric Analysis of Nigeria’s Imports Trade’. The Nigerian Journal of Economics and Social Studies (NJESS), Vol. 17 No. 3.
Thirlwall, A.P. (1999), “Growth and Development with Special Reference Developing to Developing Countries,” Macmillan London & Basingstoke.
Thursby, J. and M. Thursby (1984) ‘How Reliable are Simple, Single Equation Specifications of Imports Demand’ Review of Economic and Statistics, Vol. 66, 120 - 128
Yekini, T. K. (1999) Determinants of Exports Supply and the Demand for Imports in a Liberalized Economy, NISER Monograph Series, No. 28, Ibadan, Nigeria. Pp.1- 37