Causal Relationship between Economic Openness and Growth of Sectoral Output in Nigeria

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Abstract

This paper assesses the causal relationship between economic openness and growth of sectoral output in Nigeria over the period of 1985 – 2019. Secondary data gathered from World Bank and Central Bank of Nigeria (CBN) Statistical Bulletin were used. Time series was employed for estimating the model. Growth of sectoral output was the dependent variable while financial depth, economic openness, government effectiveness, inflation rate, exchange rate and interest rate were the independent variables in the model. The findings revealed that trade openness and service output per capital growth had a positive relationship at both side at 10% 
and 5% significance level, while other variables had negative relationship. Based on the findings, the study recommended that government should diversify Nigeria economy, focus on infrastructure facilities, make provisions and enforce the uses of sophisticated farm tools among others.