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Cluster Development in a Transforming Economy: The Case of Motorcycle Spare Parts Firms in Nnewi, Anambra State of Nigeria

Tobechi F. Agbanike, Augustine C. Osigwe, Denis N. Yuni, Thank-God C. Onoja and Sunday A. Okwor
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Tobechi F. Agbanike: Department of Economics and Development Studies, Alex Ekwueme Federal University, Ndufu-Alike, Ebonyi State, Nigeria.
Augustine C. Osigwe: Research and Training Division National Institute for Legislative Studies, National Assembly, Abuja, Nigeria.
Denis N. Yuni: Department of Economics and Development Studies, Alex Ekwueme Federal University, Ndufu-Alike, Ebonyi State, Nigeria.
Thank-God C. Onoja: Department of Economics and Development Studies, Alex Ekwueme Federal University, Ndufu-Alike, Ebonyi State, Nigeria.
Sunday A. Okwor: Department of Economics and Development Studies, Alex Ekwueme Federal University, Ndufu-Alike, Ebonyi State, Nigeria.

Economy, 2019, vol. 6, issue 1, 13-24

Abstract: This paper examined the impact of cluster development in Nnewi, Anambra State of Nigeria. The estimated parsimonious model revealed that capital and labour were significant determinants of sales made by the firms while the cluster dummy variable was insignificant. This insignificance of the cluster dummy variable implied that, in terms of total sales, there was no significant difference between firms in the cluster and firms outside the cluster. For the profit model, we found that capital, labour and the cluster dummy were significant at 1% level. Capital, labour and cluster dummy have a positive relationship with firm profit. The positive coefficient of the cluster dummy variable indicated that the profit of firms in the cluster was significantly higher than that of the firms outside the cluster by about ?31,050. It was therefore concluded that cluster residency made a significant difference in firm profit and recommended that government should encourage cluster development to accelerate the transformation of the economy.

Keywords: Cluster; Economy; Firms; Motorcycle; Nnewi; Nigeria. (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:aoj:econom:2019:p:13-24

DOI: https://doi.org/10.20448/journal.502.2019.61.13.24

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