Effect of Economic and Social Globalization on Pro-Poor Growth in Nigeria
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Date
2023-05-27
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Human Resource Management Academic Research Society
Abstract
The thrust of this study is the implication of economic and social globalization on pro-poor
growth. The KOF indexes of de facto and de jure globalization was utilized for this study. Data
on the variables were obtained from the National Bureau of Statistics (NBS) and World Bank
WDI among others. The data analysis was conducted using ARDL model, bounds cointegration
and unit root test in addition to descriptive statistics. The results showed that the variables
are fractionally integrated as observed from the unit root test. This finding necessitated the
application of bounds cointegration which showed evidence of long run relationship between
poverty headcount and globalization indexes. The ARDL results revealed that economic
globalization has a positive and significant effect on poverty headcount in the short run. This
finding is synonymous with the long-run results, which showed evidence of a significant
positive effect of economic globalization on poverty headcount. The implication of this finding
is that the benefits of economic globalization in terms of trade in goods and services, trade
regulations and agreements, FDI inflows, portfolio investments, foreign debt, and other forms
of financial globalization have not trickled down to the poor.The results further showed that
social globalization has a negative and significant effect on poverty headcount. However,
there is evidence of positive and insignificant effects of political globalization on poverty
headcount in both the long and short run. Given the findings, it is recommended that
policymakers prioritize social globalization to trickle-down its intended and desired benefits
of poverty reduction.
Description
This study examines the implications of economic and social globalization on pro-poor growth in Nigeria, with poverty headcount serving as the key indicator. The analysis employs both de facto and de jure globalization indexes from the KOF Globalization Database, while data on poverty and related variables were sourced from the National Bureau of Statistics (NBS), the World Bank’s World Development Indicators (WDI), and other secondary sources. Methodologically, the study applies unit root tests, the bounds cointegration approach, and the autoregressive distributed lag (ARDL) model, supported by descriptive statistics.
Findings reveal that the variables are fractionally integrated, justifying the use of bounds cointegration, which confirms a long-run relationship between poverty headcount and globalization indicators. Results from the ARDL model show that economic globalization has a positive and significant effect on poverty both in the short and long run, suggesting that benefits from trade, investment, and financial flows have not trickled down to the poor. Conversely, social globalization exhibits a negative and significant effect on poverty, indicating its potential to reduce deprivation. Political globalization, however, exerts a positive but insignificant effect in both the short and long run.
The study recommends that policymakers prioritize social globalization strategies to ensure inclusivity and maximize its potential for poverty reduction while addressing the inequalities embedded in economic globalization.
Keywords
Pro-poor Growth, Poverty Headcount, Economic Globalization, Social Globalization and Political Globalization