Openness, Government Size and Economic Growth in Nigeria

Abstract

This study empirically examined the link among openness, government size and economic growth in Nigeria. For our empirical analysis, we utilized the autoregressive distributed lag (ARDL) approach to cointegration. Our analysis reports that in the long run, both financial openness and trade openness had a negative but insignificant impact on economic growth while on the other hand, physical capital and government size had significant positive and negative impacts on economic growth, respectively. Short run results reveal that financial openness, physical capital and government size had significant negative impacts on economic growth while trade openness had a significant positive impact on economic growth. The study concluded that openness and government size do not positively contribute to the country’s economic growth performance which implies that efforts by the government at eliminating constraints and impediments to free trade and the movement of capital across borders as well as increases in government size have not yielded the desired economic benefits