Private Investment Behaviour and Trade Policy Practice in Nigeria

dc.contributor.authorPhillip C. Omoke
dc.contributor.authorDipo T. Busari
dc.date.accessioned2019-04-16T12:07:36Z
dc.date.available2019-04-16T12:07:36Z
dc.date.issued2008-04-01
dc.descriptionHG 5881 .A3 B87 2008en_US
dc.description.abstractThis study presents an empirical assessment of the impact of trade policy practice and its credibility on private investment using firm level data of 67 Nigerian firms over the period 1980–2003. The study draws a distinction between sample variability and uncertainty and constructs measures of the volatility of innovations to key trade and macroeconomic variables. It then examines their association with private corporate investment by adding these constructed measures to an empirical investment equation that is estimated using panel data econometric method. The results underscore the robustness of the links among private investment, trade policy and macroeconomic uncertainty. Many of the trade and volatility measures considered in the paper show strong negative association with private investment. Furthermore, the study observed that trade policy practice in Nigeria has deterred investment by making the cost of importing high, which particularly affects firms with high import intensity. Three main channels are identified through which trade policy practice hinders corporate investment in Nigeria. First is through restrictions on international capital movement. The second is through the impact of rapid and variable devaluation of the exchange rate, which has led to a more attractive speculative market and lowed the competitiveness of domestic firms, and finally through import restrictions in terms of tariff and cost of importing. In addition, the negative impact of real exchange rate uncertainty on investment is significantly larger in firms that are import intensive. The study argues, among other things, that there is the need to liberalize international capital movement in Nigeria and drastically reduce the cost of importing capital goodsen_US
dc.description.sponsorshipAERCen_US
dc.identifier.isbn9966-778-25-X
dc.identifier.urihttp://aercafricalibrary.org:8080/123456789/400
dc.publisherAERCen_US
dc.relation.ispartofseriesworking papers;Research paper 177
dc.subjectInvestment - Foreign - Nigeriaen_US
dc.subjectNigeria - Commercial - Policyen_US
dc.subjectCommercial Policyen_US
dc.subjectPrivate investment,en_US
dc.subjecttrade policy credibilityen_US
dc.subject, macroeconomic uncertaintyen_US
dc.subjectpanel data estimation,en_US
dc.titlePrivate Investment Behaviour and Trade Policy Practice in Nigeriaen_US
dc.typeArticleen_US
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