Munich Personal RePEc Archive

Determinants of Manufacturing Sector Performance and Its Contribution To Gross Domestic Product In Nigeria

Kenny S, Victoria (2019): Determinants of Manufacturing Sector Performance and Its Contribution To Gross Domestic Product In Nigeria.

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Abstract

The Manufacturing sector is regarded as a very important sector in an economy because of its capacity to foster wide and efficient backward and forward linkages among other sectors of the economy. This study examines the determinants of manufacturing sector performance and its contribution to gross domestic product in Nigeria using a time series data from 1981 to 2015 using Johansen Cointegration and the Vector Error Correction Model. The study found that while labour force, gross fixed capital formation and exchange rate showed a positive long run relationship with the manufacturing value added, the average manufacturing capacity utilisation, lending interest rate and government expenditure showed a long run negative relationship. The study recommends that policies should be geared towards making the exchange rate, lending interest rate and government capital expenditure more favourable and productive in the manufacturing sector.

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