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Estimation of disaggregated import demand functions for Nigeria

Authors: Madichie, Chekwube V.; Nwogwugwu, Uche C.; Ngwu, Franklin N.; Mauka, Olisaemeka D.;

Estimation of disaggregated import demand functions for Nigeria

Abstract

This paper estimates disaggregated import demand function for Nigeria using annual data from 1970 to 2019. The study employs the Zivot-Andrews unit root and Gregory-Hansen cointegration tests to account for the role of structural breaks and the error correction mechanism for shortrun analysis, respectively. The results show that household consumption, industrial output and domestic investment are the major determinants of import demand for consumer, intermediate and investment goods, respectively. Furthermore, the import demand for investment goods is not sensitive to variations in relative prices. However, relative prices is negative and significant to import demand for consumer and intermediate goods. Exchange rate is negative and significant only in import demand for investment goods. Moreso, structural break plays a vital role in modelling all categories of import demand in Nigeria. The study recommends that the managed floating exchange rate regime should be sustained to influence the import demand for consumer and capital goods, while the import demand for intermediate goods should be encouraged since domestic production relies heavily on imported inputs. In addition, the policymakers should take cognizance of the role of structural breaks when formulating import demand policies.

Keywords

import demand function, Gregory-Hansen, ddc:330, F32, Nigeria, Zivot-Andrews, F12, F13, O24, structural breaks

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selected citations
These citations are derived from selected sources.
This is an alternative to the "Influence" indicator, which also reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Citations provided by BIP!
popularity
This indicator reflects the "current" impact/attention (the "hype") of an article in the research community at large, based on the underlying citation network.
BIP!Popularity provided by BIP!
influence
This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Influence provided by BIP!
impulse
This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network.
BIP!Impulse provided by BIP!
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