Do Cross-Border Capital Inflows Help or Hurt Exports in Pre- and Post-Crisis Global Financial Crisis in Nigeria

Whether cross-border capital inflows support or undermine the export sector in Nigeria accommodating global financial crisis: global financial crisis (GFC) of 2007–2009 and before the crisis (1986–2007) and after it (the full 1986–2025 sample) using panel Generalized Method of Moments estimation. The explanatory variables are cross-border capital flow, the real effective exchange rate (REER), a global financial conditions (contagion) index and an external vulnerability index; a crisis dummy is added for the post-crisis model. In the pre-crisis model, REER (−0.0009) and capital flow (−0.023) are reported as significant at the 1% level and both are negative. In the post-crisis model, REER remains negative (−0.0015) but the capital-flow coefficient reverses to +0.275. The global financial conditions and vulnerability indices are insignificant in both periods. Instrument validity is not rejected in either model, but the pre-crisis Arellano–Bond AR(2) probability of 0.081 is borderline, so the pre-crisis estimates are treated as indicative. The sign reversal is consistent with a shift from capital inflows that appreciated the currency and fed Dutch-disease pressures to inflows that supported exporters’ finance and investment. Policy should therefore differentiate by type of capital inflow and keep the exchange rate competitive.