THE IMPACT OF GLOBALIZATION ON ECONOMIC PERFORMANCE: COMPARATIVE EVIDANCE FROM NIGERIA AND INDONESIA

ABSTRACT
This study examines the impact of globalization on economic performance in Nigeria and Indonesia from 1995 to 2023, focusing on exports, imports, foreign direct investment (FDI), and interest rates as key indicators of integration into the global economy. Using secondary World Bank data and a panel regression methodology, the analysis reveals significant country-specific impacts. In Indonesia, FDI has emerged as a crucial growth driver, boosting capital accumulation, knowledge transfer, and participation in global value chains. In contrast, in Nigeria, interest rate volatility has a negative impact, undermining the potential benefits of trade liberalization and investment flows. Exports and imports, while vital for global integration, do not constantly have large effects in either scenario, underscoring the relevance of structural and institutional constraints in mitigating globalization’s influence. The data show that globalization is not a uniform process, but rather one influenced by domestic characteristics such as institutional quality, economic diversification, and macroeconomic stability. Indonesia’s relatively diverse economy and stronger institutional structure enable it to better harness globalization, but Nigeria’s reliance on oil exports and weak governance impede inclusive economic outcomes. Policy proposals emphasize the need for Nigeria to diversify its manufacturing base and stabilize its financial condition. The study indicates that globalization provides significant prospects for economic transformation, but these gains are contingent on strong domestic policies and institutions