Assessment of Domestic Investment, Export Expansion and Economic Performance in Nigeria: A Vector Autoregression Approach

Abstract

The purpose of this article is to investigate the nexus between domestic investment, export expansion and economic growth in Nigeria. To achieve this purpose, annual time series data from the period between 1981 and 2018 was tested using the Johansen co-integration analysis, VECM and the Granger-Causality test. The result of the analysis revealed an insignificant relationship between domestic investment and export expansion. Based on the Granger-Causality test, the result indicated a bi-directional relationship between domestic investment and economic growth. These results provide evidence that domestic investment and economic growth are not viewed as sources of export expansion in Nigeria during the period under review. Therefore, changes in policies and regulations to accelerate the export expansion of Nigeria will ultimately yield positive results in terms of achieving high rates of stable economic growth. Policymakers in Nigeria should search for the alternative catalyst to stimulate domestic investment and economic growth geared towards promoting long-term export expansion in Nigeria effectively.