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  • i

    INTERDEPENDENCE OF INTERNATIONAL TRADE AND

    MIGRATION IN A GLOBALISING ECONOMY: THE

    EVIDENCE FROM NIGERIA

    BY

    EBENEZER ADESOJI OLUBIYI

    Matric. No. 103681

    B.Ed (Econs), M.Sc. Econs (Ibadan)

    A Thesis in the Department of Economics

    Submitted to the Faculty of the Social Sciences

    in partial fulfillment of the requirements for the Degree of

    DOCTOR OF PHILOSOPHY

    Of the

    UNIVERSITY OF IBADAN

    JANUARY, 2013

  • ii

    ABSTRACT

    The connection between trade and emigration has received increased attention in the literature. It

    has been shown that trade barriers and lack of adequate technology contribute to low exports and

    high imports of developing countries. This partly explains their high unemployment rate which,

    by implication, generates tendency to emigrate. Also, remittances from emigrants tend to

    increase imports. Although, researchers have investigated various aspects of trade, the

    connection between it and emigration has been generally neglected. This study examined the

    relationship between trade and emigration in Nigeria covering the period between 1980 and

    2010.

    A gravity model, based on a modified Hecsher-Ohlin framework, was employed to estimate the

    trade-emigration relationship between Nigeria and five of her major trading partners – United

    States (US), United Kingdom (UK), Sweden, Italy and Canada. Three-level analyses were

    carried out in order to gain a deeper insight into trade-emigration relationship as follows: Nigeria

    and the trading partners as a group, Nigeria and each of the countries, and product-based

    (agricultural goods, textiles, food and beverages, chemicals, manufactures and petroleum

    products). Data were sourced from the World Integrated Trade Solution (WITS) and World

    Development Indicators (WDI). The Arellano-Bover System Generalized Method of Moments

    estimation technique was used to check simultaneity and endogeneity problems, while the Sagan

    tests of over-identifying restrictions were carried out to validate the instrumental variables used.

    All estimates were set at 5% level of significance.

    Emigration was negatively associated with exports (-0.20) and positively associated with imports

    (0.03). The export elasticities of emigration to Canada, US and Sweden were positive with 0.47,

    0.27, and 3.90 coefficients respectively. Emigration responded positively to changes in imports

    from these countries with their corresponding coefficients respectively being 0.39, 0.2 and 1.58.

    Exports to Italy and UK were negatively related to emigration with an estimate of -3.90 and -

    0.09 respectively, while import elasticities of emigration from these countries were negative with

    estimates of -1.58 and -0.11 respectively. Exports of agricultural products, textiles and food and

    beverages to Canada, UK and US were negatively associated with emigration. Increases in

    emigration to these countries were associated with increases in imports of manufactured

    products, food and beverages and chemicals with coefficients ranging from 0.02 to 0.76.

    However, increases in emigration were associated with decreases in imports of agriculture and

    textiles products with respective estimates ranging from -1.05 and -0.01. Agriculture, textiles,

    and food and beverages export elasticities of emigration were, to Italy (0.02, 0.67, and 0.05) and

    to Sweden (1.91, 0.03 and 1.28). Manufactured import elasticities of emigration to these

    countries were -0.54 and -0.33 respectively.

    There is a strong connection between trade and emigration in Nigeria. Declining exports and

    rising imports was associated with increased emigration. Declining exports and rising imports of

    food and beverages, textiles and agricultural products partly accounted for increased emigration.

    Increase in manufactured goods, and chemical were associated with decrease in emigration.

    Government should therefore adopt policies that stimulate exports and moderate imports.

    Keywords: Emigration, Trade, Gravity Model, Generalized Method of Moments.

    Word count: 484

  • iii

    DEDICATION

    To the Alpha and Omega, the Everlasting and Almighty GOD for;

    He is the Author and finisher of my faith.

  • iv

    ACKNOWLDEGEMENT

    I am grateful to God Almighty for making it possible by making the long-standing dream come

    to reality. He always assure me that the programme will come to a successful end in spite of all

    hindrances encountered.

    My special appreciation goes to the thesis committee members for their immense contributions at

    every level of the thesis. Prof. T. Ademola Oyejide, exposed me to the culture of research and

    taught me how to read, digest and summarise the literature. He expanded my sense of

    imagination, deepens my understanding, and liberated my innate ability in the area of academic

    research. Professor Emmanuel O Ogunkola taught how to be organized, to be specific, objective

    and how to ensure coherence in my write up. His role in the theoretical framework and

    methodology of the thesis and how the thesis should be structured cannot be overemphasised.

    Dr. Abiodun S Bankole was very influential to deepening my thoughts in how to articulate and

    establish the thesis’s problem statement. I am grateful sirs.

    I am indebted to the Department of Economics, University of Ibadan for providing favourable

    environment for those who care to learn. I appreciate the effective contribution of the Head,

    Prof. F. Ekwaghide to my thesis. I am also grateful to all the academic staff for imparting

    valuable knowledge in me and also for their insightful comments at every stage of the thesis. My

    special appreciation goes to Dr. Adeolu O Adewuyi for his brotherly advice and encouragement.

    The description of his assistance to this thesis is too voluminous to be mentioned here. I also

    recognize the contribution of Dr. Oyinlola, particularly in the development of the thesis’s

    abstract.

    I appreciate wonderful assistance rendered by the non-academic staff of the department. May

    God reward you abundantly. I recognize the spiritual, financial and physical assistance provided

    by many people whose names are just too many to be mentioned because of space. I appreciate

    you all.

    Ebenezer A. Olubiyi.

  • v

    CERTIFICATION

    We certify that this work was carried out by Mr. Ebenezer Adesoji OLUBIYI in the department

    of Economics, University of Ibadan.

    ----------------------------------------------------------------------------

    T. Ademola Oyejide

    B.Sc (Ibadan), M.Sc, (London)., Ph.D. (Princeton)

    Supervisor and Chairman, thesis committee

    Emeritus Professor, Department of Economics

    University of Ibadan, Nigeria

    --------------------------------------------------------------------------

    E. Olawale Ogunkola

    B.Sc., M.Sc., Ph.D (Ibadan)

    Member, thesis committee

    Professor of Economics and Dean Faculty of the Social Sciences

    University of Ibadan, Nigeria.

    --------------------------------------------------------------------------------

    A. Surajudeen Bankole

    B.Sc (OAU), M.Sc., Ph.D. (Ibadan)

    Member, thesis committee

    Associate Professor, Department of Economics,

    University of Ibadan, Nigeria

  • vi

    TABLE OF CONTENTS

    TITLE PAGES

    Title Page i

    Abstract ii

    Dedication iii

    Acknowledgement iv

    Certification v

    Table of contents vi

    List of tables xii

    List of figures xv

    List of abbreviations xvi

    CHAPTER ONE: INTRODUCTION 1

    1.1 Preamble 1

    1.2 Problem Statement 4

    1.3 Objectives of the thesis 9

    1.4 Hypothesis of the thesis 9

    1.5 Justification of the thesis 10

    1.6 Scope of the thesis 14

    1.7 Organisation of the thesis 14

    CHAPTER TWO: REVIEW OF TRADE AND MIGRATION POLICY IN NIGERIA

    AND PERTNER COUNTRIES 16

    2.1 Trade policies of Nigeria, Canada, the US and the EU 16

    2.1.1 Trade policies of Nigeria 16

    2.1.2 Trade policies of the EU in relation to Nigeria 22

  • vii

    2.1.3 Trade policies of the US in relation to Nigeria 25

    2.1.4 Trade policies of Canada of Canada in relation to Nigeria 30

    2.2 Immigration policies of the US, Canada and the EU 34

    2.2.1 Immigration policies of the US 34

    2.2.2 Immigration

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