1.1 Background of the Study
The study of economic growth cannot be properly Discussed without mentioning trade as an engine of economic growth, be it domestic trade or trade with other countries. The new classical economists, for example, drawing from historical evidence from the nineteenth Century, likened trade to an engine of growth (Nurske, 1961). Also, Kravis (1970) dubbed trade to be the handmaiden of growth. It has, therefore, become imperative for every Government to pay keen attention to matters relating to trade especially how to attain a higher real productivity in the export sector.
Exports are goods and services produced domestically and purchased by foreigners. Net exports are the difference between total exports and total imports. According to Afolabi (2011) Export can be defined as surplus goods and services of a country that are sent to other countries in the world for sale.
Samuelson and Nordhaus (2010) see exports as the mirror image of imports. That one countries export is anothers imports. However, export is any goods or commodity transported from one country to another country in a legitimate fashion typically for use in trade (Oluchi, 2007).
Just as there have been a continue increase in the importance of foreign trade so, also have the study of the concept by researchers been on an increase. This however, has led to the evolvement of several theories to analyze the impact of export on economic growth. According to Bbaale and Mutenyo (2011) as cited in Ugwuegbe and Uruakpa 2013) the present literature presents several plausible theoretical arguments supporting the view that exporting activities and overall economic growth are positively associated. On the one hand, exporting implies that a country gains access to the wider external demand, which acts as a stimulus to domestic output and hence economic growth. Second, it is frequently argued that small domestic markets may not grow continuously and that any positive economic shock leading to the expansion of the domestic markets is more likely to decay quickly. On the other hand, large external markets do not always encompass growth restrictions of economies of scale. However, the relationship between exporting and economic growth remains controversial as some authors have argued that export growth precedes economic growth hence giving a stance to the export-led growth (ELG) hypothesis (Arnade et al, 1995; Fosuthornton, 1996).on the other hand, others have provided evidence in support of the growth-led export hypothesis (GLE) by arguing that economic growth comes before export growth (Krugman,1984,Lancester,1980;Henriques and Sadorsky, 1996; Al-Yousif, 1999;Kernel et al, 2002).
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THE IMPACT OF EXPORT EARNINGS IN THE ECONOMIC GROWTH OF NIGERIA.