Exchange Rate and Trade Balance in Nigeria: Testing for the Validity of J-Curve Phenomenon and Marshall-Lerner Condition

Innocent U Duru (), Millicent Adanne Eze (), Abubakar Sadiq Saleh (), Abubakar Yusuf () and Kelechi Uzoma ()

Asian Themes in Social Sciences Research, 2022, vol. 6, issue 1, 1-11

Abstract: This study examined the validity of the J-Curve Phenomenon and Marshall-Lerner Condition in the Nigerian context using data from 1982-2020. The Autoregressive Distributed Lag Bounds test method of cointegration was employed for the analysis of short-run and long-run effects of exchange rate uncertainty on the trade balance. The long-run result endorsed the validity of the Marshall-Lerner Condition in Nigeria. Thus, a depreciation of the Naira improves the trade balance in the long run. However, the results of the short-run dynamics revealed that there is no J-Curve phenomenon in Nigeria. The study recommends diversification of exports to improve the performance of Nigeria’s non-oil exports. In addition, fiscal, monetary and exchange rate policies should be properly harmonized to tackle trade deficits. Furthermore, there should be more investment in Research and Development in Nigeria to improve the value of goods exported and the competitiveness of its exports in the arena of international trade.

Keywords: Exchange rate; Trade balance; J-Curve phenomenon; Marshall-Lerner condition; Nigeria. (search for similar items in EconPapers)
Date: 2022
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://knowledge-press.com/index.php/ATSSR/article/view/65/30 (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:kpr:atissr:v:6:y:2022:i:1:p:1-11:id:65

Access Statistics for this article

More articles in Asian Themes in Social Sciences Research from Knowledge Press
Bibliographic data for series maintained by Stephen Walters ( this e-mail address is bad, please contact ).