EFFECT OF TRANSPORT INFRASTRUCTURE ON ECONOMIC COMPLEXITY IN NIGERIA
Yakubu Ahmed Taruwere , Egbewole Abdulazeez Bunmi and Soliu Abdullahi Olalekan
Volume 12 Issue 3
Abstract
This study investigates the relationship between transport infrastructure and economic complexity in Nigeria between 1998 and 2023. Using the Autoregressive Distributed Lag (ARDL) model, the research examines both the short-run and long-run dynamics between the Economic Complexity Index (ECI) and key explanatory variables, including the Transport Composite Index (TCI), Gross Domestic Product (GDP), and Foreign Direct Investment (FDI). Preliminary analysis through trend evaluation and descriptive statistics revealed fluctuating patterns in ECI and moderate changes in TCI, alongside volatile GDP and FDI trends. Unit root tests confirmed that all variables are integrated of order one, justifying the ARDL bounds test approach. The bounds test revealed a significant long-run relationship among the variables. The short-run ARDL results showed that GDP and FDI have statistically significant positive impacts on economic complexity, while TCI had a negative lagged effect, indicating possible adjustment costs. In the long run, GDP maintained a significant and positive effect on ECI, while both TCI and FDI were statistically insignificant. Diagnostic tests confirmed the robustness of the model, with no evidence of serial correlation, heteroskedasticity, or non-normality. The findings suggest that while economic growth significantly enhances economic complexity in Nigeria, transport infrastructure improvements may not yield immediate or direct long-term effects unless strategically aligned with industrial and trade policy. The study recommends enhancing infrastructure efficiency, fostering sustainable growth, and improving the investment climate to achieve greater economic diversification and complexity. Keywords: Economic Complexity, Transport Infrastructure, ARDL, GDP, FDI.
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