This study examined the relationship between economic growth and the resulting effect of institutional quality on trade openness in Nigeria. Data used in the study were obtained from the World Development Indicators (WDI) published by the World Bank for the period 1990-2020. The Analysis of Covariance (ANCOVA) model was employed to investigate the relationship among the variables of interest. The study’s findings show that the effect of institutional quality on trade openness positively influences economic growth in Nigeria. Also, the study’s findings suggest that trade openness, without the moderating effect of institutional quality, negatively influences economic growth in Nigeria. The findings further indicate that economic growth is negatively related to the moderating effect of institutional quality on all sectors. That is, institutional quality is only effective when it moderates international trade-related activities. Finally, the findings show that foreign direct investment and imports (control variables) negatively influence economic growth in Nigeria. The study recommends that the Nigerian government put friendly international trade policies in place, such as reducing the tax paid on goods and services coming into or going out of Nigeria. It also recommends that the government of Nigeria strengthen regulations and control corruption in international trade activities, as it is an effective way of promoting economic growth in Nigeria. It further recommends policy reforms regarding the moderating effect of institutional quality on economic activities other than international trade. The study finally recommends that the Nigerian government strengthen the enforcement of contracts and other related regulations to attract foreign investors into Nigeria.

Index Terms: Institutional Quality, Trade Openness, Economic Growth, ANCOVA Model, Nigeria.

JEL: L51, F13, F43, C54.