Economic Globalisation and Treasury Bills Returns in Nigeria

This study examines the relationship between economic globalization and returns of treasury bills yield in Nigeria between 1986 and 2022. The study employed Autoregressive Distributed Lag Modelling with inferences at 5% significant level. The findings of the study show that Foreign Direct Investment (FDI) has a negative but statistically insignificant effect on the returns of treasury bills (coefficient = -3.333237, p-value = 0.1172. Foreign Portfolio Investment (FPI) positively affects treasury bills yield, but the effect is also statistically insignificant (Coefficient = 4.640911, p-value = 0.1809). Interestingly, Financial Liberalisation (FIL) has a positive impact on treasury bills yield (coefficient = 9.369694 and p-value = 0.0647), Net Capital Flow (NCF) also has a positive but insignificant effect (p-value = 0.2915). The Interest Rate (INTR) is negative and statistically insignificant in the long run (p-value = 0.4476). Credit to Private Sector (LCPS) shows a positive, though insignificant, impact on treasury bills yield (p-value = 0.2232). Lastly, Trade Openness (TOP) has a significant negative impact on treasury bills yield, (p-value = 0.0614, indicating that increased trade openness may lower returns in this market. Based on the findings of this study, the study recommended that since FDI showed insignificant effects in many areas, it is vital to develop policies that encourage sustainable and productive investments. The government should prioritize sectors that align with national development goals and ensure that foreign investments contribute to local economic growth, job creation, and technology transfer.