Exploring the interaction of trade openness, income inequality, and poverty in Nigeria
Keywords:trade openness, income inequality, poverty ARDL methodology
The literature on the nexus between trade openness, income inequality and poverty appears conspicuously and of diverse outcomes. Perhaps, the mixed findings may be attributed to the methodology and economic structure of the country in view. The current study examines the trade openness on income inequality and poverty in Nigeria between 1981 and 2019 using Autoregressive Distributed Lags (ARDL) methodology. Our findings show that trade openness had different effects on inequality and poverty in Nigeria in the short and long run. While its relationship with inequality is a short-run phenomenon, it had a long-run relationship with poverty. Overall, trade openness had a declining effect on inequality and poverty. In the former, its impact was not statistically significant. However, the gains of trade openness on inequality and poverty were reversed when inequality influenced trade openness. In essence, with the influence of inequality, trade openness had an increasing effect on poverty. As a result, this study makes several recommendations to policymakers. To begin, a policy framework must be established to ensure that Nigerian trade is integrated with the rest of the world. Evidence from this study has suggested that policies such as restricting trade through border closures must not feature as a policy option as long as one of the goals of the economy is poverty reduction and reduction in inequality.
How to Cite
Copyright (c) 2021 Olukayode Emmanuel Maku, Jimoh Sina Ogede, Oluwaseyi Adedayo Adelowokan, Bamidele Olaitan Oshinowo
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
Authors who publish with this journal agree to the following terms:
1. Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution License that allows others to share the work with an acknowledgement of the work's authorship and initial publication in this journal.
2. Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgement of its initial publication in this journal.
3. Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See The Effect of Open Access).