Abstract
This study examined the relationship between financial openness and economic growth in Nigeria. The study utilised annual time series data from the World Bank Database for the period 1983-2022. The specific objectives that the study achieved include investigating the effect of financial openness (FDIGDP) on Nigeria’s economic growth (GDPG) and determining the causal relationship between financial openness and economic growth in Nigeria. The study employed the ADF and Phillip-Peron unit root test, ARDL Bounds test for cointegration, and the error correction mechanism. The result of the unit root test revealed that the variables were stationary at mixed order of integration (levels and first difference), while the ARDL Bounds test revealed the presence of a long-run relationship. The findings of the study further revealed that financial openness exerted a positive and significant long-run effect on economic growth within the study period. The error correction mechanism indicated that 38.80% of the short-run disequilibrium is corrected in the long-run. The result from the Granger causality test also showed that there is a unidirectional relationship running from financial openness to economic growth. No causation was found between other variables and economic growth during the period of this study. The paper recommended that policymakers should actively promote policies that enhance financial openness, such as reducing barriers to foreign investment and improving regulatory frameworks. This can attract more foreign direct investment, thereby stimulating economic growth.