_____________________________________________________________________________________________________ *Corresponding author: E-mail: taiwoakinlo@yahoo.com; British Journal of Economics, Management & Trade 12(2): 1-10, 2016, Article no.BJEMT.20202 ISSN: 2278-098X SCIENCEDOMAIN international www.sciencedomain.org Trade Openness and Government Expenditure Nexus in Nigeria: A Bounds Test Cointegration Approach Olusola Joel Oyeleke 1 and Taiwo Akinlo 2* 1 Department of Economics, Obafemi Awolowo University, Ile-Ife, Nigeria. 2 Department of Economics, Adeyemi College of Education, Ondo, Nigeria. Authors’ contributions This work was carried out in collaboration between both authors. Both authors read and approved the final manuscript. Article Information DOI: 10.9734/BJEMT/2016/20202 Editor(s): (1) Ramesh Mohan, Department of Economics, Bryant University, RI, USA. Reviewers: (1) A. R. Athapathu, University of Colombo, Sri Lanka. (2) Pinar Goktas, Mugla Sitki Kocman University, Turkey. Complete Peer review History: http://sciencedomain.org/review-history/13091 Received 16 th July 2015 Accepted 2 nd September 2015 Published 27 th January 2016 ABSTRACT This study examined the trade openness and government Expenditure nexus in Nigeria over the period 1980-2013. To analyze the relationship among openness, recurrent expenditure, capital expenditure, total expenditure and exchange rate we adopted ARDL modelling approach to cointegration which is most appropriate technique over some other techniques of integration after examined the stationarity of data through ADF and KPSS tests. The bound testing procedure is used to determine the existence of long run relationships among variables. The results show that there is no cointegration among the variables. Capital expenditure and recurrent expenditure have negative and significant effect on openness while total expenditure and exchange rate on the other hand are positive and significant. Keywords: Trade openness; government expenditure; economic growth; Nigeria. Original Research Article