This paper examined the relationship between resource endowment and export diversification and its implication for economic growth in Nigeria based on data from 1981 to 2015. The result of the Granger causality test suggests that unidirectional causality runs from oil production to economic growth, while export diversification does not granger cause economic growth. From the error correction result, it was established that export diversification positively impacts growth from the last two periods, while in the current period, it has negative effect on growth. This means that the key issue with Nigerian economy might not be structural but institutional. That is, even if the economy is diversified, the expected result may still be a ruse without appropriate economic institutional reform. The study concludes that specialisation is preferred to diversification for Nigeria in the current circumstance. Hence, the key issue to sustain growth in Nigeria is not in the number of productive sectors but in their efficiency.
Acemoglu, D., and Zilibotti, F. (1997). Was Prometheus unbound by chance? Risk Diversification and growth. Journal of Political Economy, Vol. 105 No. 4, pp. 709-751.
Aditya, A. and Acharyya, R. (2015). Trade liberalization and export diversification. International Review of Economics and Finance, Vol. 39, pp. 390-410.
Albassam, B.A. (2015). Economic Diversification in Saudi Arabia: Myth or Reality? Resource Policy, Vol. 44, pp. 112-117.
Alexeev, M., Chernyavskiy, A. (2015). Taxation of natural resources and economic growth in Russia’s regions. Economic Systems, Vol. 39, pp. 317-338.
Andersen, T.B., Barslund, M., Hansen, C.W., Harr, T., and Jensen, P.S. (2014). How much did China’s WTO accession increase economic growth in resource rich countries? China Economic Review, Vol. 30, pp. 16-26.
Balavac, M. and Pugh, G. (2016). The link between trade openness, export diversification, institutions and output volatility in transition countries. Economic System, Vol. 40, pp. 273-287.
Central Bank of Nigeria (CBN) Statistical Bulletin (2015) Statistical Data on all Sectors of the Nigerian Economy on CD Rom. December 2015
Cirera, X., Marin, A., and Markwald, R. (2015). Explaining export diversification through firm innovation decisions: The case of Brazil. Research Policy, Vol. 44, pp. 1962-1973.
Dickey, D. A. and Fuller, W. A. (1981) The likelihood ratio statistics for autoregressive time series with a unit root, Econometrica, Vol. 49, pp. 1057-72.
di Giovanni, J., and Levchenko, A. A. (2006). Openness, volatility and the risk content of exports. In Conference The Growth and Welfare Effects of Macroeconomic Volatility by The World Bank, CEPR and CREI, Barcelona pp. 17-18.
Doppelhofer, G., Miller, R. I., and Sala-i-Martin, X. (2000). Determinants of long-term growth: A Bayesian averaging of classical estimates (BACE) approach (No. w7750). National bureau of economic research.
Eregha, P.B., and Mesagan, E.P. (2016). Oil resource abundance, institutions and growth: Evidence from oil producing African countries. Journal of Policy Modeling, Vol. 38, pp. 603-619.
Gaitan, B., and Roe, T. L., (2011). International trade, exhaustible-resource abundance and economic growth. Review of Economic Dynamics. Vol. 15, pp. 72-93.
Gupta, S. D. (2009, May). Comparative advantage and competitive advantage: an economics perspective and a synthesis. In 43rd Annu Conf CEA. Toronto (pp. 29-31).
Hunt, S. D., and Morgan, R. M. (1995). The comparative advantage theory of competition. The Journal of Marketing, pp. 1-15.
Isham, J., Woolcock, M., Pritchett, Lant., and Busby, G. (2005). Resource export structures and the political economy of Economic Growth. The World Bank Review, Vol. 19 no. 2, pp. 141.174.
Klinger, B., and Lederman, D. (2011). Export discoveries, diversification and barriers to entry. Economic Systems, Vol. 35, pp. 64-83.
Leamer, E. (1984), Source of International Comparative Advantage: Theory and Evidence, Cambridge, MA: MIT Press
Lederman, D., and Maloney, W. F. (2009). Trade structure and growth. R. New farmer, W. Shaw, & P. Walkenhorst, Breaking into New Markets: Emerging Lesson for Export Diversification, pp. 39-54.
Makhlouf, Y., Kellard, N.M., and Vinigradou, D. (2015). Trade Openness, export diversification and political regimes. Economic Letters, Vol. 136, pp 25-27.
Malik, A., Temple, J. (2009). The geography of output volatility. Journal of Development Economics, Vol. 90 No. 2, pp. 163-178.
Murshed, S.M., and Serino, L.A. (2011). The pattern of specialization and Economic growth: The resource curse hypothesis revisited. Structural Change and Economic Dynamics, Vol. 22, pp 151-161
Omgba, L.D. (2014). Institutional foundations of export diversification patterns in oil-producing countries. Journal of Comparative Economics, Vol. 42, pp. 1052-1064.
Porter, M. E. (1985). Competitive advantage: creating and sustaining superior performance. 1985. New York: Free Press.
Porter, M. E. (1990). The competitive advantage of nations. Harvard Business Review, Vol. 68 No. 2, pp. 73-93.
Prahalad, C. K., and Hamel, G. (2006). The core competence of the corporation. In Strategische unternehmungsplanung — strategische unternehmungsführung pp. 275-292. Springer Berlin Heidelberg.
Rostow, W. W. (1990). The stages of economic growth: A non-communist manifesto.
Regolo, J. (2013). Export Diversification: How much does the choice of the trading partner matter? Journal of International Economics, Vol. 91, pp. 329-342
Sachs, D. J., and Warner, A.M. (1995). Natural resource abundance and economic growth. NBER working paper no. W5398.
Sala-i-Martin, X. X. (1997). I just ran two million regressions. The American Economic Review, pp. 178-183.
Shao, S., and Yang, L. (2014). Natural resource dependence, human capital accumulation, and economic growth: A combined explanation for the resource curse and the resource blessing. Energy Policy, Vol. 74, pp. 632-642.
UNCTAD (United Nations Conference of Trade and Development). (2012). Handbook of statistics 2011. New York: UNCTAD.
Walkenhorst, P. and Cattaneo, O. (2006). Trade Diversification and Growth in Nigeria. Munich Personal RePEc Archive. MPRA Paper No, 23735.
World Development Indicator (2016). World Bank Data on CD Rom Washington D.C
WTO (2010). Trade theory and natural resources. World Trade Report. pp. 72-111, February. Available online at https://www.wto.org/english/res_e/booksp_e/anrep_e/wtr10-2c_e.pdf.