Performance of Total Factor Productivity and Trade Openness on Economic Growth: An Empirical Evidence for Nigeria

Abstract

Nigeria adopted a macroeconomic model that relied on inward
orientation and import substitution strategy of urban industrial
development since its emergence as an independent nation in 1960.
After the introduction of structural adjustment programme (SAP) in
1986, Nigerian economy has been relatively more open as a result of
the policy measure applied by the government. This study employs
Autoregressive Distributed Lag (ARDL) model in order to examines
the impact of total factor productivity and trade openness on
economic growth in Nigeria using ARDL model from 1980 – 2023.
After conducting empirical analysis, the result shows that TFP and
trade openness have positive effects on economic growth in Nigeria
and highlights the significant role that total factor productivity and
trade openness play in driving economic growth in the economy. The
study recommends for the promotion of innovation through incentives
by the Government and private sector in order to enhance research
and development that will provide stable business environment and
stimulate economic growth and development.