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Abstract
The impact of trade on industry growth in Nigeria has generated lots of empirical studies with different findings. Trade is generally believed to be positively related with economic growth. More precisely, it is held that appropriate trade policies in certain situations can be used to stimulate growth and development. However, diverse opinions have continued to emerge on how trade can affect industrial activities. The main objective of this study is to ascertain the impact of trade on industy growth. Endogenous growth model is employed for the study with emphases on how export, import, foreign direct investment and real exchange rate affect economic growth in Nigeria. The main objective of this research is to ascertain the nature of relationship between industry growth and trade. Therefore, this study has empirically examined the impact of trade on industry growth in Nigeria using annual time series data for the period 1981-2019. The variables considered are real GDP, a proxy for economic growth, export value, import value, foreign direct investment and real exchange rate as independent variables. Augmented Dickey-fuller (ADF) test was used for the unit root test and the variables were found to be stationary at second difference. Then Johansen (1988) technique was used to establish if the stationary variables are co-integrated. Further, ECM is employed to correct any form of disequilibrium in the short run. The result of stationarity and normality test reveals that the model is fairly well specified and could be used for policy analysis. The analysis was based on data extracted from Central Bank of Nigeria (CBN) statistical bulletin and World Development Indicators (WDI). The result of the analysis shows that all the variables except real exchange rate were statistically significant at 5%. The results reveal that there is, overall, a positive relationship between industry growth and trade. The study therefore suggest that the government should adopt policies capable of stimulating trade as well as maintain a stable exchange rate which will ensure gainful trading activities to the country and its citizenry.
