Achieving Sustainable Growth in Developing Countries, Does Export Really Matter?

Abstract

This study tries to ascertain if export really matter in developing countries quest to achieving sustainable growth using Nigeria case study. With the Toda-Yamamoto Granger Causality framework, the study found that as variables that influences growth, export and import are significant in accentuating sustainable growth. In specific terms, on the average, a percentage increase in export stimulates economic growth by 2.45 while a percentage increase in import dampens economic growth by about 0.23 percent. The direction of causal relationship suggests that there is unidirectional causality running from export to economic growth suggesting the existence of export-led growth hypothesis for Nigeria. Also, there exists unidirectional causality running from export to economic growth an indication that the causality running from export to economic growth is the strongest, revealing that export-led growth hypothesis holds for Nigeria. This suggests that to achieve sustainable growth in Nigeria, it is necessary to encourage export, although emphasis should also be on import restrictions through the provision of transparent regulatory policy and framework.