Do Trading Partners Still Matter For Nigeria's Growth? A Contribution To The Debate On Decoupling And Spillovers

Have developing and emerging market countries decoupled from the US enough to grow despite significant recession in the US? Using VAR models, this paper addresses this question for Nigeria in the context of the global crisis. The results seem to debunk the "Decoupling theory" and suggest there are still significant spillovers from Nigeria's main trading partners, including the US, with trade and commodity price linkages being the dominant transmission channels. Given the sharp fall in trade financing and commodity prices in the aftermath of the crisis, these results provide some explanation to the realization of adverse second-round effects in Nigeria.