Globalization and Poverty Rate in Nigeria: An Empirical Analysis
Okungbowa, Florence. O. Ewere, Eburajolo, Ose Courage

Abstract
This study investigated the relationship between globalization and Poverty rate in Nigeria. The study employed the two basic channels theory to explain the relationship that exists between globalization and poverty rate within the Nigeria context. The study adopted a co-integration and error correction modeling techniques on an annual time series data within the periods of 1981 – 2009.A unique co-integration between poverty rate and the explanatory variables in the study is found. In order to determine the short-run dynamics around the equilibrium relationship, we estimated an error correction model (ECM). The empirical findings in this study shows that an increase in openness by (1) one unit will bring about a decline in poverty rate by 0.46209 percent in the current period showing a negative relationship. However, openness has a positive and significant impact on poverty in Nigeria during the period under study. Domestic investment (INV) was statistically significant and has a positive impact on poverty reduction, the current value of FDI responded negatively in terms of relationship and insignificantly to poverty in Nigeria, whereas, the first lagged FDI was statistically significant and also negatively related to poverty. This however shows delayed response. The results of the study suggest the need for Government to encourage globalization, by embarking on trade liberalization policies in order to accelerate and sustain industrial growth and in turn reduce poverty also bearing in mind the growth and development of home industries which is also paramount to development, government should make sure that the globalization process is implemented in a gradual pace. As rapid globalization could be disadvantageous to industrial growth and this can in effect or breed more poverty.

Full Text: PDF