What is the Effect of Economic Globalisation on the Productivity of the Manufacturing Sector of Ghana?

Yeboah Asuamah, Samuel and Broni Pinkrah, Samuel and Quansah Abbey, Paul (2016): What is the Effect of Economic Globalisation on the Productivity of the Manufacturing Sector of Ghana?

Abstract

The research paper investigates the stable long run hypothesis between globalisation and manufacturing sector productivity for Ghana for the period 1961-2013 using annual time series data. The augmented Dickey Fuller (ADF, for unit root analysis) and Kwiatkowski–Phillips–Schmidt–Shin (KPSS, unit root analysis), OLS (regression analysis), Johansen test (long run analysis), VECM (short run analysis), and the granger causality (causality analysis) tests were used. The findings suggest the data were integrated of order one. The findings of the study seem to indicate that the manufacturing sector has not benefited from globalisation. There is the need to introduce various policy measures such as improvement in security to reduce risk and uncertainty of foreign investment into the manufacturing sector; improvement in infrastructure to encourage domestic and foreign investment into the manufacturing sector; and strong political will to attract investors into the sector. Further studies should consider the effect of other factors (electricity) and other proxies of globalisation (foreign direct investment, financial liberalisation, investment liberalisation, and multinational firm activity) on the manufacturing sector performance to determine if the findings will be replicated. The issues of structural breaks should be investigated in future studies.

• Item Type: MPRA Paper
• Language: English
• Keywords: Manufacturing Sector, Trade Openness, Globalisation, Long Run
• Subjects: F - International Economics > F1 - Trade > F14 - Empirical Studies of Trade; L - Industrial Organization > L6 - Industry Studies: Manufacturing

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