Globalization and Economic Growth in Nigeria: An ARDL Cointegration Approach

Among the advantages of globalization facilitated by the interplay of innovation and technology,are access to foreign capital and new markets. In order to improve their lots and increase theirprospects of survival, countries and organizations are embracing the new trend. This study aims atevaluating the long and short run effects of globalization on the Nigerian economy. The study uses,unlike other similar studies, a number of econometric methods of autoregressive distributed lag(ARDL), cointegration bound tests, and unit root tests, to examine the long and short runrelationship between globalization and economic growth. The presence of a long-run relationshipbetween the variables is supported by cointegration bound tests. The sources of annual time seriesdata used are World Bank Database (WDI), the KOF Swiss Economic Institute Database and theNigerian Central Bank Statistical Bulletin. Findings show that Nigeria's economic growth ispositively and significantly affected by the globalization index, foreign direct investment andinternational remittances. Capital accumulation is found to be significant but with negative signs.The effects of trade openness on economic growth is however found to be insignificant. The studyrecommends that individuals and the government should utilize technical and global opportunitiespresented by globalization to strengthen the country’s productive capacity, leveraging onproductive use of remittance inflows.