Globalization and Relative Trade of a Developing Country: Evidence from Nigeria
Joseph I. Amuka (PhD) ; Chukwuma C. Ugwu (PhD); Anthony O. Agu (PhD)

Globalization has promoted the integration and interdependence of the economies of various nations and regions of the world through trade liberalisation. Proponents of globalization hold the view that both the strong and weak economies have benefits to derive from it. Opponents contend that developing countries may not benefit because of the nature of their exports. This paper used quarterly data from Nigeria from 2000 to 2010 built on Error Correction Model to investigate the effect of globalization on the relative trade of developing countries. We used the ratio of export to import to measure relative trade. The result was mixed. Inflow of foreign direct investment reduced export-import ratio while openness to trade increased it. Secondly, the negative effect of foreign direct investment on export-import ratio outweighed the positive effect of openness, showing the challenge faced by developing countries under globalization

Full Text: PDF     DOI: 10.15640/jibe.v4n2a6