Impact of a free trade agreement on unemployment and productivity growth in Nigeria

Oluwaseun Adeniran Sunday (), Hamisu Ali () and Ikeh Frank Emeka ()

Journal of Contemporary Research in Business, Economics and Finance, 2024, vol. 6, issue 1, 23-35

Abstract: This research investigates the impact of a free trade agreement on unemployment and productivity growth in Nigeria over the period 1981–2019. Data was collected from the World Bank Development Indicators (WDI) online database as of 2020. The study employed various analytical methods, including unit root tests, autoregressive distributed lag (ARDL) bound tests, error correction models (ECM), and cumulative sum (CUSUM) and cumulative sum of squares (CUSUMSQ) tests to assess data stability. The ARDL bound test statistics (F-statistics) of 4.26914 and 7.680624 exceeded the critical values for both I(0) and I(1) bounds, indicating a meaningful relationship between the variables. In the long run, physical capital, human capital development, and economic growth were found to have a negative impact on unemployment, with statistical significance. Additionally, sectoral productivity growth negatively influenced aggregate productivity growth. The error correction model (ECM) indicated a weak speed of adjustment, suggesting that the disequilibrium takes around 13% of the time to return to equilibrium annually. Based on these findings, the study recommends the implementation of safeguards to protect vulnerable industries, particularly in manufacturing and agriculture. Additionally, the government should focus on fostering human capital development by ensuring the availability of suitable support measures.

Keywords: Agreement; Free trade; Growth; Productivity; Unemployment. (search for similar items in EconPapers)
Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
https://learning-gate.com/index.php/2641-0265/article/view/919/221 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ajp:jcrbef:v:6:y:2024:i:1:p:23-35:id:919

Access Statistics for this article

More articles in Journal of Contemporary Research in Business, Economics and Finance from Learning Gate
Bibliographic data for series maintained by Michael Laurence ().