TO GET THE COMPLETE JOURNAL/THESIS FOR TOPIC BELOW,
CALL: 08168759420, 08068231953
WHATSAPP: 08137701720
DETERMINANTS OF NIGERIA’S CAPITAL GOODS IMPORT DEMAND ELASTICITIES
Abstract
Im port dem and elasticities are im portant for understanding the structure of any economy and for the forecasting of economic phenomena. Existing studies show that dem and for im ports depends on price, incom e and exchange rates. The present study aim s to contribute to existing works on im ports, but with em phasis on capital goods. T he study is im portant because of the critical role of capital goods in developm ent; every econom y needs a lot of capital goods to pow er growth. Capital goods are durable goods used in further production o f goods and services. The study, which used the Pooled Least Squares analytical technique and the sim ple log linear form ulation of the im port dem and equation, found that Nigeria’s demand for capital goods was price inelastic. Accordingly, policy action, working through price manipulations, may not effectively influence im port dem and in the desired direction. F urtherm ore, Nigeria’s capital goods expenditure had not kept pace with her income growth performance. There was evidence that less w as spent on capital goods as national incom e increased. Finally, it was found that exchange rate deterioration had little effect on capital goods im port. In other w ords, the depreciation of the national currency did not appear to discourage the im portation of capital goods.
K eyw ords: Import demand, elasticity, economic growth, exchange rate, trade