Munich Personal RePEc Archive

Terms of Trade, Trade Openness and Government Spending in Nigeria

Obiakor, Rowland and Okwu, Andy and Akpa, Emeka (2021): Terms of Trade, Trade Openness and Government Spending in Nigeria. Published in: Nigerian Defence Academy Journal of Economics and Finance , Vol. 5, No. 2 (September 2021): pp. 55-62.

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In this study, we estimated the short-run and long-run effect of terms of trade, trade openness and government spending in Nigeria from 1981 to 2019. Data for this study was sourced from the World Bank’s World Development Indicators (WDI), Central Bank of Nigeria’s (CBN) Statistical Bulletin, and FRED Economic Data. Using the ARDL estimation method, the study found that terms of trade do not significantly determine government spending in both the short-run and long-run. The short-run effect of trade openness on government was not significant, but its long-run effect was negative and statistically significant, confirming the efficiency hypothesis in the relationship between trade openness and government spending.

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