Do Oil And Non-Oil Balance of Trade Impact Similarly on Malaysia and Nigeria GDP?

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1st International Conference on Economics, Finance and Management Outlooks 20-21 December, 2013 Pearl International Hotel, Kuala Lumpur, Malaysia

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Abstract of Economics, Finance and Management Outlooks, 2013, Vol.1
DOI: 10.18488/journal.1003/2013.1/1003.1
1st International Conference on Economics, Finance
and Management Outlooks
20-21 December, 2013
Pearl International Hotel, Kuala Lumpur, Malaysia
Conference Website: www.pakrdw.com
57
Do Oil And Non-Oil Balance of Trade Impact Similarly on
Malaysia and Nigeria GDP?
Onalo Ugbede1
--- Mohd Lizam2
--- Ahmad Kaseri3
--- Stephen Makoji Robert4
1,2,3
Faculty of Technology Management, Universiti Tun Hussein Onn Malaysia
4
Salford Business School, University Of Salford, Manchester, United Kingdom
Abstract
Despite the fact that there is a close link between GDP and the balance of trade,
limited studies focussed on the oil and non-oil dichotomised effects of net exports or
balance of trade on the GDP. This study therefore, painstakingly investigates
specifically the impact of oil and non-oil balance of trade on Malaysia and Nigeria GDP.
Data were collected for period 1971-2010 and regression equations defining oil, non-oil
and total balance of trade as independent variables and GDP as dependent variable is
employed to analyse data. Augmented Dickey-Fuller Tests equation was employed to
perform unit root tests for stationary and cointegration tests. From the analysis, oil,
nonoil and total balance of trade contributes immensely to the Malaysia GDP.
Contrary, only the oil and total balance of trade impact positively on the Nigeria GDP.
The Nigeria non-oil balance of trade on the whole has performed below expectation
thereby impacting adversely on the Nigeria GDP. Though Nigeria total balance of trade
show better results, sectoral impact of the non-oil sector is much more significant a
determinant of the quality of a country’s GDP. This study therefore recommends that
Nigeria should enhance her export promotion strategies and diversify her economy far
away from crude oil.
Keywords: Oil, Non-oil, Total balance of trades, GDP, Exports, Imports.

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