Are the Determinants of Imports Similar Across Manufactured Products? Evidence from Nigeria

Abstract

The study investigates the determinants of selected manufactured imports in Nigeria with a special focus on the role of domestic production.  The autoregressive distributed lag (ARDL) in the context of new trade theory was utilised with data coverage between 1985 and 2016.  Results show that imports of various manufactured products are affected differently by some factors. In particular, domestic output of electrical & electronics have a significant and negative effect on own imports. However, there was no significant effect of domestic production of petroleum products on imports of the same goods. Also, the effect of domestic output of food & beverages on imports of same product is positive. Further, the sensitivity of imports to exchange rate changes differ across products, in some it have immediate effect while in some it delays for a year. In the same vein, while GDP is an important driver of imports of some products, it is unimportant for some.  Also, it is only food & beverages imports that significantly respond to change in tariffs. The overall conclusion from this study is that drivers of import demand differ across products.