Inward FDI and Manufacturing Sector Productivity: An Empirical Evidence from the Dynamic ARDL Approach.
Öz
The real sector for which the manufacturing sector is a part play key role in the quest for achieving economic growth of any country. A high output in the manufacturing sector will connote a high level of GDP all things been equal. However, the productivity of the manufacturing sector is directly dependent on the capital-labour ratio. Thus, this study seeks to examine the impact of foreign capital (FDI) and domestic labour force (population) on the manufacturing sector output in Nigeria. The choice of ARDL approach by this study is informed by the mixed order of integration from the unit root test. The finding indicates that FDI inflow significantly and positively determine the manufacturing output in Nigeria, while labour influence the manufacturing in a positive but insignificant way. Further result prove that the impact of labour force is elastic, indication that little change in the labour force will cause drastically change in the level of output in the manufacturing output. In general, the manufacturing sector is capital-driven rather labour-driven. A recommendation is made of the need for the improvement in education and training to increase the efficiency of labour. Secondly, since FDI capital demonstrate significant positive impact, the authority concern should device policy that will woo more it into the sector for higher productivity. Such policy include, tax holidays, stable exchange rate and lower interest rate to enable smooth flow of investment.
Anahtar Kelimeler
Kaynakça
- Adejumo, A. V. (2013). Foreign direct investments and manufacturing sector performance in Nigeria,(1970-2009). Australian Journal of Business and Management Research, 3(4), 39.
- Afamefuna Angus, E. Z. E., Nnaji, M., & Nkalu, N. C. (2019). Impact of Foreign Direct Investment on Manufacturing Sector Output Growth in Nigeria. International Journal of Applied Economics, Finance and Accounting, 5(2), 55-64.
- AGU, O. C., & OKOLI, T. T. (2015). Foreign direct investment flow and manufacturing sector performance in Nigeria.
- Anowor, O. F., Ukweni, N. O., Ibiam, F. O., & Ezekwem, O. S. (2013). Foreign direct investment and manufacturing sector growth in Nigeria. International Journal of Advanced Scientific and Technical Research, 5(3), 231-254.
- Azeroual, M. (2016). The impact of foreign direct investment on the productivity growth in the Moroccan manufacturing sector: Is source of FDI important. Journal of International and Global Economic Studies, 9(1), 29-45.
- Bakar, N. A. A. (2019). FDI and manufacturing growth: Bound test and ARDL approach. International Journal of Research in Social Sciences, 9(5), 36-91.
- Banga, R. (2006). The export-diversifying impact of Japanese and US foreign direct investments in the Indian manufacturing sector. Journal of International Business Studies, 37(4), 558-568.
- Bardesi, H. J. (2016). The Impact Of Fdi On Growth Of Saudi Economy: An Empirical Evaluation Of Manufacturing Sector. Eurasian Journal of Economics and Finance, 4(3), 1-13.
- Birsan, M., Moraru, C., Cramarenco, R., & Andrei, S. (2005). Contribution of FDI to the Privatisation in the Manufacturing Sector in Romania. Success and Failure Stories. chemical industry, 8, 6.
- Corvers, F. (1997). The impact of human capital on labour productivity in manufacturing sectors of the European Union. Applied Economics, 29(8), 975-987.
- Fauzel, S., Seetanah, B., & Sannasee, R. V. (2015). Productivity spillovers of FDI in the manufacturing sector of Mauritius. evidence from a dynamic framework. The Journal of Developing Areas, 295-316.
- Hernández-Coss, R., & Bun, C. E. (2007). The UK-Nigeria remittance corridor: challenges of embracing formal transfer systems in a dual financial environment.
- Idoko, C. U., & Taiga, U. U. (2018). Effect Of Foreign Direct Investment (FDI) On Manufacturing Output In Nigeria (1981–2016). Advances in Social Sciences Research Journal, 5(5).
- Jordaan, J. A. (2008). Intra-and inter-industry externalities from foreign direct investment in the Mexican manufacturing sector: New evidence from Mexican regions. World Development, 36(12), 2838-2854.
- Lean, H. H. (2008). The impact of foreign direct investment on the growth of the manufacturing sector in Malaysia. International Applied Economics and Management Letters, 1(1), 41-45.
- Li, X., Liu, X., & Parker, D. (2001). Foreign direct investment and productivity spillovers in the Chinese manufacturing sector. Economic systems, 25(4), 305-321.
- Masron, T. A., Zulkafli, A. H., & Ibrahim, H. (2012). Spillover effects of FDI within manufacturing sector in Malaysia. Procedia-social and behavioral sciences, 58, 1204-1211.
- Nikoloski, D. (2017). The impact of Foreign Direct Investments on employment: the case of the Macedonian manufacturing sector. Eastern Journal of European Studies, 8(2), 147-165.
- Nkoro, E., & Uko, A. K. (2016). Autoregressive Distributed Lag (ARDL) cointegration technique: application and interpretation. Journal of Statistical and Econometric methods, 5(4), 63-91.
- Orji, A., Anthony-Orji, O. I., Nchege, J. E., & Okafor, J. (2015). Manufacturing output and foreign direct investment in Nigeria: A new evidence. International Journal of Academic Research in Economics and Management Sciences, 4(3), 16-28.
- Qiu, B., Yang, S., Xin, P., & Kirkulak, B. (2009). FDI technology spillover and the productivity growth of China’s manufacturing sector. Frontiers of Economics in China, 4(2), 209-227.
- Tartiyus, E. H., Dauda, T. M., & Peter, A. (2015). Impact of population growth on economic growth in Nigeria. IOSR Journal of Humanities and Social Science (IOSRJHSS), 20(4), 115-123.
- ul Haq, A. (2012). Determinants of capital structure: A case from textile industry of Pakistan. International Journal of Academic Research in Business and Social Sciences, 2(4), 408.
- Vu, H. D. (2016). Technical efficiency of FDI firms in the Vietnamese manufacturing sector. Review of Economic Perspectives, 16(3), 205-230.
- Wang, M. (2009). Manufacturing FDI and economic growth: evidence from Asian economies. Applied Economics, 41(8), 991-1002.
Inward FDI and Manufacturing Sector Productivity: An Empirical Evidence from the Dynamic ARDL Approach.
Öz
The real sector for which the manufacturing sector is a part play key role in the quest for achieving economic growth of any country. A high output in the manufacturing sector will connote a high level of GDP all things been equal. However, the productivity of the manufacturing sector is directly dependent on the capital-labour ratio. Thus, this study seeks to examine the impact of foreign capital (FDI) and domestic labour force (population) on the manufacturing sector output in Nigeria. The choice of ARDL approach by this study is informed by the mixed order of integration from the unit root test. The finding indicates that FDI inflow significantly and positively determine the manufacturing output in Nigeria, while labour influence the manufacturing in a positive but insignificant way. Further result prove that the impact of labour force is elastic, indication that little change in the labour force will cause drastically change in the level of output in the manufacturing output. In general, the manufacturing sector is capital-driven rather labour-driven. A recommendation is made of the need for the improvement in education and training to increase the efficiency of labour. Secondly, since FDI capital demonstrate significant positive impact, the authority concern should device policy that will woo more it into the sector for higher productivity. Such policy include, tax holidays, stable exchange rate and lower interest rate to enable smooth flow of investment.
Anahtar Kelimeler
Kaynakça
- Adejumo, A. V. (2013). Foreign direct investments and manufacturing sector performance in Nigeria,(1970-2009). Australian Journal of Business and Management Research, 3(4), 39.
- Afamefuna Angus, E. Z. E., Nnaji, M., & Nkalu, N. C. (2019). Impact of Foreign Direct Investment on Manufacturing Sector Output Growth in Nigeria. International Journal of Applied Economics, Finance and Accounting, 5(2), 55-64.
- AGU, O. C., & OKOLI, T. T. (2015). Foreign direct investment flow and manufacturing sector performance in Nigeria.
- Anowor, O. F., Ukweni, N. O., Ibiam, F. O., & Ezekwem, O. S. (2013). Foreign direct investment and manufacturing sector growth in Nigeria. International Journal of Advanced Scientific and Technical Research, 5(3), 231-254.
- Azeroual, M. (2016). The impact of foreign direct investment on the productivity growth in the Moroccan manufacturing sector: Is source of FDI important. Journal of International and Global Economic Studies, 9(1), 29-45.
- Bakar, N. A. A. (2019). FDI and manufacturing growth: Bound test and ARDL approach. International Journal of Research in Social Sciences, 9(5), 36-91.
- Banga, R. (2006). The export-diversifying impact of Japanese and US foreign direct investments in the Indian manufacturing sector. Journal of International Business Studies, 37(4), 558-568.
- Bardesi, H. J. (2016). The Impact Of Fdi On Growth Of Saudi Economy: An Empirical Evaluation Of Manufacturing Sector. Eurasian Journal of Economics and Finance, 4(3), 1-13.
- Birsan, M., Moraru, C., Cramarenco, R., & Andrei, S. (2005). Contribution of FDI to the Privatisation in the Manufacturing Sector in Romania. Success and Failure Stories. chemical industry, 8, 6.
- Corvers, F. (1997). The impact of human capital on labour productivity in manufacturing sectors of the European Union. Applied Economics, 29(8), 975-987.
- Fauzel, S., Seetanah, B., & Sannasee, R. V. (2015). Productivity spillovers of FDI in the manufacturing sector of Mauritius. evidence from a dynamic framework. The Journal of Developing Areas, 295-316.
- Hernández-Coss, R., & Bun, C. E. (2007). The UK-Nigeria remittance corridor: challenges of embracing formal transfer systems in a dual financial environment.
- Idoko, C. U., & Taiga, U. U. (2018). Effect Of Foreign Direct Investment (FDI) On Manufacturing Output In Nigeria (1981–2016). Advances in Social Sciences Research Journal, 5(5).
- Jordaan, J. A. (2008). Intra-and inter-industry externalities from foreign direct investment in the Mexican manufacturing sector: New evidence from Mexican regions. World Development, 36(12), 2838-2854.
- Lean, H. H. (2008). The impact of foreign direct investment on the growth of the manufacturing sector in Malaysia. International Applied Economics and Management Letters, 1(1), 41-45.
- Li, X., Liu, X., & Parker, D. (2001). Foreign direct investment and productivity spillovers in the Chinese manufacturing sector. Economic systems, 25(4), 305-321.
- Masron, T. A., Zulkafli, A. H., & Ibrahim, H. (2012). Spillover effects of FDI within manufacturing sector in Malaysia. Procedia-social and behavioral sciences, 58, 1204-1211.
- Nikoloski, D. (2017). The impact of Foreign Direct Investments on employment: the case of the Macedonian manufacturing sector. Eastern Journal of European Studies, 8(2), 147-165.
- Nkoro, E., & Uko, A. K. (2016). Autoregressive Distributed Lag (ARDL) cointegration technique: application and interpretation. Journal of Statistical and Econometric methods, 5(4), 63-91.
- Orji, A., Anthony-Orji, O. I., Nchege, J. E., & Okafor, J. (2015). Manufacturing output and foreign direct investment in Nigeria: A new evidence. International Journal of Academic Research in Economics and Management Sciences, 4(3), 16-28.
- Qiu, B., Yang, S., Xin, P., & Kirkulak, B. (2009). FDI technology spillover and the productivity growth of China’s manufacturing sector. Frontiers of Economics in China, 4(2), 209-227.
- Tartiyus, E. H., Dauda, T. M., & Peter, A. (2015). Impact of population growth on economic growth in Nigeria. IOSR Journal of Humanities and Social Science (IOSRJHSS), 20(4), 115-123.
- ul Haq, A. (2012). Determinants of capital structure: A case from textile industry of Pakistan. International Journal of Academic Research in Business and Social Sciences, 2(4), 408.
- Vu, H. D. (2016). Technical efficiency of FDI firms in the Vietnamese manufacturing sector. Review of Economic Perspectives, 16(3), 205-230.
- Wang, M. (2009). Manufacturing FDI and economic growth: evidence from Asian economies. Applied Economics, 41(8), 991-1002.
Ayrıntılar
| Birincil Dil | İngilizce |
|---|---|
| Bölüm | Araştırma Makalesi |
| Yazarlar | |
| Yayımlanma Tarihi | 20 Aralık 2021 |
| Yayımlandığı Sayı | Yıl 2021Cilt: 13 Sayı: 4 |
