LASU Journal of Employment Relations and Human Resource Management
(LJERHRM)
ISSN: 2705-3482
Volume 6, No. 1, 2026
Pages 74-89
DOI: 10.36108/ljerhrm/6202.60.0160
Trade Openness, Industrial Development and Employment Generation in Nigeria
Amamizo Hezekiah OGUNNUBI1*, & Sunday Sesan ABERE2
1,2,Department of Economics, Ajayi Crowther University, Oyo, Oyo State, Nigeria
Abstract
This paper examined the effects of trade openness and industrial output on employment creation in Nigeria between 1981 and 2022. The challenge of employment creation is one of the key macroeconomic issues in Nigeria even as more integration into the global economy and industrial reforms goes on. Current literature focuses mainly on either trade or industrialization, thus failing to capture how the two could simultaneously impact labour markets. This paper filled this gap by exploring the individual and combined effects of trade openness and industrial output on the employment. The research used the Autoregressive Distributed Lag (ARDL) modelling method, which was appropriate under mixed order of integration, and secondary data, which was obtained in the Central Bank of Nigeria and the World Development Indicators. The results indicated the presence of an equilibrium relationship of the variables in the long-run. Trade openness empirically had positive and statistically significant influence on both long and short-term employment. Industrial production has a positive impact on employment in the short-term but has no significance in the long-term. Exchange rate showed both negative and positive impacts, foreign direct investment and GDP per capita have positive impacts on employment, especially in the long-run. This paper concluded that trade openness is an effective way of creating jobs but only under a strong local industrial capacity. It proposed policies which encourages export-oriented industrialization, strengthen local industries, and macroeconomic stability. The research is valuable to the body of knowledge by offering empirical data on the combined effect of trade and industrial output in determining the outcome of employment in Nigeria.
Keywords: Trade openness, Industrial output, Employment generation, Labour market dynamics, Economic integration