Globalization and capital formation in Nigeria

  • Benedict Ikemefuna Uzoechina Department of Economics, Nnamdi Azikiwe University, Awka 420102, Anambra State, Nigeria
  • Precious Chidinma Okafor Department of Economics, Nnamdi Azikiwe University, Awka 420102, Anambra State, Nigeria
  • Ngozi Florence Ezenwobi Department of Economics, Nnamdi Azikiwe University, Awka 420102, Anambra State, Nigeria
  • Geraldine Amaka Ekwoh Department of Economics, University of Nigeria, Nsukka 410101, Enugu State, Nigeria
  • Chika Maureen Okaforocha Department of Economics, Nnamdi Azikiwe University, Awka 420102, Anambra State, Nigeria
  • Ndubisi John Edeh Department of Economics, Nnamdi Azikiwe University, Awka 420102, Anambra State, Nigeria
Ariticle ID: 1133
233 Views, 166 PDF Downloads
DOI: https://doi.org/10.59400/fefs.v2i2.1133
Keywords: trade; trade globalization; economic growth; financial globalization; foreign direct investment; capital stock

Abstract

No country can achieve sustained economic growth without substantial investments in capital formation. Nigeria is rich in natural resources, but due to inadequate capital and technology, these resources have not been fully tapped and maximized. This study seeks to provide another gateway to unlocking the dearth of capital formation for development by specifically investigating the impact of financial and trade globalization on capital formation in Nigeria within the period 1990–2022. The autoregressive distributed lag (ARDL) technique was adopted for data analysis. The findings of this study indicate that while trade globalization has a negative effect on capital formation in both the long run and short run, respectively, financial globalization exerts a negative effect on capital formation in the long run but a positive effect in the short run. Nevertheless, financial and trade globalization exert detrimental effects on capital formation in the long run. A major policy recommendation is that Nigeria should play a key role in the African Continental Free Trade Area in order to boost her trade and financial competitiveness within Africa and so be able to lunch herself into the global space and thus tap the potential benefits of trade and financial globalization.

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Published
2024-05-08
How to Cite
Uzoechina, B. I., Okafor, P. C., Ezenwobi, N. F., Ekwoh, G. A., Okaforocha, C. M., & Edeh, N. J. (2024). Globalization and capital formation in Nigeria. Forum for Economic and Financial Studies, 2(2), 1133. https://doi.org/10.59400/fefs.v2i2.1133
Issue
Vol. 2 No. 2 (2024)
Section
Article

Copyright (c) 2024 Benedict Ikemefuna Uzoechina, Precious Chidinma Okafor, Ngozi Florence Ezenwobi, Geraldine Amaka Ekwoh, Chika Maureen Okaforocha, Ndubisi John Edeh

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