The Nigerian Manufacturing Sector in the Era of Globalisation: Evidence from an Error Correction Model
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Abstract
Purpose: Globalization has been adjudged to be an exploitative instrument used by the Western world to advance their economy at the expense of the developing countries. In view of this, this study was developed to examine the impact of globalisation on the Nigerian manufacturing sector. Method: The study adopted the Autoregressive Distributed Lag (ARDL) and Error Correction Model (ECM) to estimate and analyse the long and short-run impacts of globalisation on manufacturing value added in Nigeria using data collected from KOF Swiss Economic Institute, and World Bank Development Indicators (WDI), covering the period from 1981 to 2020. Findings: The estimated model established that globalisation has a positive connection with manufacturing value added in Nigeria both in the short and long-run, though not statistically significant. Based on the t-statistics of the individual variables, the study came to the conclusion that although globalisation had impacted more positively on the Nigerian economy, there were still rooms for improvement, especially as regards infrastructural development, which shows a negative connection with manufacturing value added. Originality: The study adds to the existing literature on the globalization-growth nexus by looking at the manufacturing sector of the economy, an aspect which most researchers have been neglecting.
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