Trade Liberalization and Manufacturing Sector in Nigeria

Oludayo Adekunle and Samson Olusegun Akinwale

Academic Journal of Economic Studies, 2020, vol. 6, issue 3, 90-96

Abstract: This study analyzed the link between trade liberalization and manufacturing sector of Nigeria from 1986 to 2018. Autoregressive Distributed Lag (ARDL) and Pairwise Granger Causality econometric techniques were used for analysis. The existence of dynamic relationship was established between output of manufacturing sector and trade liberalization. Also, it was found that trade liberalization exerted indirect and significant impact on productivity of manufacturing sector while the causality findings indicated independent causality linking trade liberalization to output of manufacturing sector in Nigeria. This implies that trade policy impede the development and enhancement of manufacturing sector resulting from the country’s over-reliance on foreign products. It was however concluded that policy on international trade has undesirable impact on output of manufacturing sector. Thus policies on trade barrier should be totally removed in order to make the economy more open to foreign trade and putting in place structures to enhance the survival and performance of local manufacturing firms. Also, policy that will ensure stability of the nation’s currency in relation to major countries currencies should be formulated to make the importation of foreign raw materials more cheaper and facilitate exportation of manufacturing output.

Keywords: Autoregressive distributed lag; manufacturing sector; trade liberalization; trade openness (search for similar items in EconPapers)
JEL-codes: C22 E23 F13 F41 O (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:khe:scajes:v:6:y:2020:i:3:p:90-96

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