Impact of Trade Openness and Climate Change on Food Productivity in Nigeria

Abstract

Liberal trade regimes could help improve food productivity if environmental concerns such as adverse weather conditions that affect agriculture are addressed. This issue has not received adequate empirical scrutiny as linear models dominate extant literature. In this article, we check whether accounting for trade and climate change asymmetries is important in explaining food productivity in Nigeria. Using a nonlinear autoregressive distributed lag (ARDL) model, the existence of asymmetry was established in the long run but not in the short run. The long-run estimates show that high rainfall variability increases food production, but the reverse is the case in the short run where the decomposed shocks exert a negative impact. An increase in the volume of trade boosts food production in the long run, whereas the contemporaneous estimates reveal that lower trade flows enhance food productivity. The findings have important implications for food policy formulation and implementation. JEL Codes: F18, Q18, Q56