Global Value Chain and Human Development Index: The Nigerian Experience

This study examines the effect of global value chain (GVC) participation on the Human Development Index (HDI) in Nigeria. The dependent variable is HDI, while the independent variables include the backward global value chain participation index (BVC), forward global value chain participation index (FVC), the logarithm of trade openness (TOPS), and foreign direct investment (FDI). Time series data for these variables were obtained from the World Development Indicators and the Central Bank of Nigeria (CBN) Statistical Bulletin from 1900-2023. The econometric methodology employed encompasses descriptive statistics, unit root testing, bounds cointegration analysis, ARDL estimation, and residual diagnostic tests. The Augmented Dickey-Fuller (ADF) unit root test results indicate that the forward global value chain participation index is stationary at level, I(0), while BVC, HDI, TOPS, and FDI are stationary after first differencing, I(1). The ARDL estimation results reveal in the long run, backward global value chain participation index exerts a negative and statistically significant effect on HDI; forward global value chain participation index has a positive but statistically insignificant long-run effect on HDI; the logarithm of trade openness exhibits a negative and statistically insignificant long-run effect on HDI; and foreign direct investment demonstrates a positive and statistically significant long-run effect on HDI. Based on these findings, the study recommends, among other measures, that ggovernment should encourage domestic production of intermediate inputs to limit vulnerability from im