Determinants of Export Diversification in Nigeria: Any Special Role for Foreign Direct Investment (FDI)?
Abstract
The importance of export diversification is presently taking a center stage in trade literature. This paper contributed to the evolving literature by examining the extent of export diversification in Nigeria and also analyzed the impact of foreign direct investment on it. Two major methods of export diversification: export count (horizontal) and Herfindahl Index were used. Nigeria’s exports flows based on 4-digit SICT product classification were used. The Generalized Moment Methods (GMM) was used to analyze our specified model. Empirical analysis showed that foreign direct investment discourages export diversification in Nigeria, while domestic investment promotes it. Exchange rate and democratic accountability are other factors that discourage export diversification in Nigeria. No evidence was found on the impact of per capita GDP, trade openness and natural resource.References
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