Structure, Characteristics, and Determinants of Services Export in Nigeria

Journal of Economics and Business

ISSN 2615-3726 (Online)

ISSN 2621-5667 (Print)

Published: 15 September 2018

Structure, Characteristics, and Determinants of Services Export in Nigeria

Olumuyiwa Owolabi Olamade

Caleb University Imota, Nigeria

Download Full-Text Pdf

10.31014/aior.1992.01.03.28

Abstract

The perennial problems of unfavourable commodity terms of trade, early deindustrialisation, and exchange rate volatility are forcing a rethink of development strategies in developing countries. Services are now coming up as a new frontier for trade expansion and economic growth in developing countries. Several empirical studies in structural transformation studies have shown both services value added and exports as growing faster than manufacturing in many developing countries, hence the surge in the literature seeking to determine the important factors driving services export. This study expands the scope of the literature by examining the structure, characteristics, and determinants of Nigeria's services export. The Central Bank of Nigeria Statistical Bulletin provides data for our descriptive analysis and the World Development Indicators for econometric analysis. The auto-regressive distributed lag (ARDL) estimation technique was adopted for econometrics analysis following unit roots and cointegration tests. Residuals and stability tests conducted on the error correction model of the ARDL supports our regression results for valid and reliable inference. Findings show that Nigeria's services export is highly concentrated on the low- technology, low-productivity end of transport and travel services. Services export respond significantly to real income of the rest of the world, the real effective exchange rate, and services value added. Great potentials, however, exists for participation in high-end services like pipeline, maritime, and rail transport since these services are integral to holistic development of the country's huge gas, crude petroleum, and iron ore deposits.

References

  1. Auboin M., & Ruta, M. (2011). The relationship between exchange rates and international trade: a review of economic literature. WTO Staff Working Paper ERSD-2011-17.

  2. Bahmani-Oskooee, M. (1986). Determinants if international trade flows: the case of developing countries. Journal of Development Economics, 20(1), 107-123

  3. Bhagwati, J. (1984), Splintering and Disembodiment of Services and Developing Nations, The World Economy 7: 133-144

  4. Brandicourt, V., Schwellnus, C., & Wöerz, J.( 4 August 2008). Export potential in services: estimation for selected European Countries. Retrieved from http://www.i4ide.org/content/wpaper/dp20080804.pdf

  5. Covaci, G., & Moldovan, S. (2015). Determinants of service exports of Lithuania: a gravity model approach. SSE Riga Student Research Papers 2015:1(166). Retrieved from https://www.sseriga.edu/download.php?...covaci_moldovan...covaci_moldovan.

  6. Dickey, D., & Fuller, W. (1981). Likelihood Ratio Statistics for Autoregressive Time Series with a Unit Root, Econometrica, 49, 1057-1072.

  7. Feenstra, R. C. 2010. Offshoring in the Global Economy: Microeconomic Structure and Macroeconomic Implications. Cambridge, MA: MIT Press

  8. Ghani, E., & Kharas, H. Overview in The Service Revolution in South Asia, edited by Ejaz Ghani, Oxford University Press, (2010). New York: Oxford University Press

  9. Gonzales. F., Jansen, J. B., Kim, Y, & Nordas, H. K. (2012). Globalisation of services and jobs in Policy priorities for international trade and jobs, (ed.) D. Lippoldt. OECD (2012). Retrieved from www.oecd.org/trade/icite.

  10. Goswami, A. G., Mattoo, A., & Sáez, s. (2011). Exporting services: a developing country perspective. Retreived from https://www.pecc.org/resources/trade-and-investment-1/1686-exporting-services-a-developing-country-perspective-paper/file

  11. Grunfeld, L. A. & Moxnes, A. (2003). The intangible globalization: explaining the patterns of international trade in services. Norwegian Institute of International Affairs. Discussion Paper No 657. Retrieved from https://www.files.ethz.ch/isn/27384/657.pdf

  12. Hill, T. P (1977). On goods and services, Review of Income and Wealth, 24(4), pp. 315-38

  13. Hoekman, B. & Mattoo, A. (2007). Services trade and growth. In Opening markets for trade in services: countries and sectors in bilateral and WTO negotiations, 21-25 (ed.) M. Roy. Retrieved from https://www.wto.org/english/res_e/publications_e/open_market_serv_e.htm

  14. Hufbauer, G. & Warren, T. (1999). The globalization of services: what has happened? What are the implications? Retrieved from https://piie.com/publications/wp/99-12.pdf

  15. Jones, R. W. 2000. Globalization and the Theory of Input Trade. Cambridge, MA: MIT Press.

  16. Kandilov, I, T. & Grennes, T, J. (2010).  The Determinants of Service Exports from Central and Eastern Europe. Economics of Transition, Vol. 18, No. 4, pp. 763-794. Retrieved from http://dx.doi.org/10.1111/j.1468-0351.2010.00392.x

  17. Karam, F. & Zaki, C. (2012). On the determinants of trade in services: evidence from the MENA Region, The Economic Research Forum (ERF).  Working Paper 69. Retrieved from http://erf.org.eg/wp-content/uploads/2014/08/692.pdf

  18. Kaur, S. (2011). Determinants of export services of USA with its Asian partners: a panel data analysis, Eurasian Journal of Business and Economics, 4 (8), 101-117

  19. Kimura, F., & Lee, H. H. (2006). The gravity equation in international trade in services. Review of World Economics, 142(1), 92-121.

  20. Kwiatkowski, D., Phillips, P. C. B., Schmidt, P. & Shin, Y. (1992). Testing the null hypothesis of stationarity against the alternative of a unit root: how sure are we that economic time series have a unit root? Journal of Econometrics, 73, 159-178

  21. Mishra, S., Lundstrom, S., & Anand, R. (2011). Service export sophistication and economic growth, Policy Research Working Paper 5606, The World Bank. Retrieved from http://documents.worldbank.org/curated/en/170221468339911476/pdf/WPS5606.pdf

  22. Park, D., & Shin, K. (2012). The service sector in Asia: Is it an engine of growth? Asian Development Bank Economics Working Paper Series No. 322.

  23. Phạm, N. V., & Vũ, H. T. (2016). Analyzing the determinants of service trade flows between Vietnam and the European Union: a gravity model approach. VNU Journal of Science: Economics and Business, 30(5E), 51-64

  24. Shepherd, B. & Marel, E. V. D. (2010). Trade in services in the APEC Region: patterns, determinants, [G1] and policy implications. APEC Secretariat, APEC Policy Support Unit. Retrieved from https://www.apec.org/Publications/2010/10/Trade-in-Services-in-the-APEC-Region-Patterns-Determinants-and-Policy-Implications-October-2010

  25. Shingal, A. (2010). How much do agreements matters for services trade. University of Sussex, Department of Economics, World Trade Institute. Retrieved from https://mpra.ub.uni-muenchen.de/39436/7/MPRA_paper_39436.pd

  26. UNCTAD Handbook of Statistics 2017- International trade in services. Retrieved from unctadstat.unctad.ord/EN/

  27. WTO (a) (10 July 1991). Services sectoral classification list. Retrieved from http://tsdb.wto.org/Includes/docs/W120_E.doc

  28. WTO (b) WTO Services: Agreement, Part I - Scope and definition.  Retrieved from https://www.wto.org/english/tratop_e/serv_e/1-scdef_e.htm

About Us

The Asian Institute of Research is an online and open-access platform to publish recent research and articles of scholars worldwide. Founded in 2018 and based in Indonesia, the Institute serves as a platform for academics, educators, scholars, and students from Asia and around the world, to connect with one another. The Institute disseminates research that is proven or predicted to be of significant influence for the general public.

Contact Us

Please send all inquiries to the email:

editorial@asianinstituteofresearch.org

Business Address:

5th Floor, Kavling 507, Fajar Graha Pena Tower, Jl. Urip Sumohardjo No.20, Makassar, Indonesia 90234

Copyright © 2018 The Asian Institute of Research. All rights reserved

Stay Connected

  • Instagram - Black Circle
  • Facebook - Black Circle
  • LinkedIn - Black Circle