INSTITUTIONAL QUALITY AND EXPORT DIVERSIFICATION IN NIGERIA: AN EMPIRICAL INVESTIGATION

Abstract

This study examined the relationship between quality of institutions
and Nigeria’s economic diversification and how institutional
quality impacts the export diversification in Nigeria, using time
series data that are sourced from Central Bank of Nigeria (CBN)
statistical bulletin (2020), National Bureau of Statistics
(NBS,2020), World Development Indicator. The institutional
variables used are; Revenue Sources Volatility (RSV) and Quality
of Service Delivery (QSD) and Non-Oil Export (NOE) growth rate
as a proxy for export diversification. The study adopted ARDL
model as techniques of analysis given that the variables are mixture
of I(0) and I(1). The finding of the study indicate that institutional
variables are positively related to export diversification and
statistically significant at 1% in short run and at 10% in long run,
which implies that quality of institution matter for economic
diversification in Nigeria. Specifically, in long run, a 1% change in
quality of services delivery will lead to 0.23% increase in export
diversification, and in the short the speed of adjustment of all the
variables to the longrun equilibrium was found to be 89% and is
significant at 1%. The study therefore recommended that
institutions should be empowered and strengthening so that
government economic diversification agenda can be achieved in
Nigeria.