Economic Globalization, Income Inequality and Economic Growth in Nigeria: A Static Data Analysis (1986-2010)

Abstract

This study examines the impact of economic globalization on income inequality and economic growth in Nigeria from 1986 to 2010. The study methodology was mainly Static Linear Econometric Model. Two models were used to test the two dependent variables simultaneously. The findings revealed that economic globalization had caused a widening income inequality as well as reduced economic growth of Nigerian economy due to much emphasis on financial globalization and other macroeconomic imbalances rather than trade globalization. It is therefore recommended that for Nigeria economy to exploit the gains of economic globalization just like the Asian Tigers, the Government should demonstrate good governance at all tiers of government through protectionist domestic policy, fiscal efficiency, political stability, adequate infrastructural provisions and encourages entrepreneurship development in Non-oil sectors to drastically reduce income equality between the unskilled and skilled labours.

Globalisation, Economic Growth and Income Inequality in Nigeria

“…The findings of this study showed that trade globalisation and financial globalisation have differential or separate significant impacts on income inequality in Nigeria. Thus, trade globalisation is negatively associated with inequality in Nigeria, and this finding is in line with the findings by Lall et al (2007), Xu and Zou (2000) and Gries and Redlin (2009), while financial globalisation is positively associated with inequality and in line with the findings by Ogunyomi et al (2013). Furthermore, the study observes that economic growth (GRT) has negative and significant impact on income inequality, indicating that a unit increase in economic growth is expected to reduce inequality by 3.48 per cent in the long run.…”

“…The results also showed that in Southern Africa, access to secondary education and dependence on natural resources strongly and significantly reduce income inequality, while population growth and domestic investment rate have positive and significant impact on income inequality. Ogunyomi et al (2013) examined the effect of economic globalisation on economic growth and income inequality in Nigeria. The study covers the period of 1986-2010 and the ordinary least-squares technique was used.…”

“…From the reviewed literature, it is noted that the findings on the relationship among globalisation, economic growth and inequality remain inconclusive. Also, the only study on the Nigeria economy (Ogunyomi et al, 2013) focused only on the impact of globalisation on economic growth and inequality. The study failed to examine issues of causality among the variables and also to evaluate if there exist differential impacts of trade and financial globalisation on inequality as argued in the literature.…”

“…Empirical literatures on the relationship among globalisation, economic growth and income inequality have yielded mixed results. Some studies reported that globalisation is associated with the reduction in inequality (Adams, 2008; Jensen & Rosas, 2007; Reuveny & Li, 2003), while others showed that globalisation is associated with rising inequality (Ogunyomi et al, 2013; Park, 2017; Pradhan, 2009). Taking an intermediate stands, Edwards (1997) observed an insignificant relationship between globalisation and inequality.…”

Trade Openness Effect on Income Inequality: Empirical Evidence from Indonesia

“…Neo-liberalism economic policy that pushed globalization had contributed to raise the income inequality (Cornia and Kiiski, 2001). Pessimistically, globalization considered a thing that affected the increase of income inequality (Mahesh, 2016;Zakarian and Fida, 2016;Wong, 2016;Asteriou et al, 2014;Ogunyomi et al, 2013).…”