Manufacturing Sector Output and Economic Growth

Igwemma; A.A; Ibeanusi Desmond Chikwado; Udeji Cynthia C.

doi:10.56201/ijefm.v11.no6.2026.pg48.58

📄 Download Paper

Manufacturing Sector Output and Economic Growth

Igwemma, A.A, Ibeanusi Desmond Chikwado, Udeji Cynthia C.

Abstract

This study examines the relationship between manufacturing sector output and economic growth in Nigeria using annual time series data covering the period 1981 to 2023. The study incorporates real gross domestic product as the dependent variable, while manufacturing sector output , interest rate , and inflation rate serve as explanatory variables. The Augmented Dickey-Fuller unit root test was employed to determine the stationarity properties of the variables. The results revealed a mixed order of integration, with RGDP, MSO, and ITR integrated of order one, I(1), and INF integrated of order zero, I(0). Consequently, the Autoregressive Distributed Lag bounds testing approach was adopted to examine the long-run relationship among the variables. The ARDL bounds test confirmed the existence of a long-run relationship between manufacturing sector output and economic growth. The estimated long-run coefficients indicate that manufacturing sector output exerts a positive and statistically significant impact on economic growth in Nigeria. Interest rate shows a negative relationship with economic growth, while inflation exhibits a positive but statistically insignificant effect. The Error Correction Model results reveal that manufacturing output also has a significant positive short-run effect on economic growth. The study concludes that strengthening the manufacturing sector is essential for promoting sustainable economic growth in Nigeria. It recommends the implementation of supportive industrial and macroeconomic policies to enhance sectoral performance and long- run economic stability. Section One

References

Adenikinju, A. and Alaba, O (2021), Energy use and productivity performance in the Nigerian manufacturing sector (1970-90). Centre for econometric and allied research and department of economics; University of Ibadan. Adofu, I., Taiga, U. U., and Tijani, Y. (2020). Manufacturing sector and economic growth in Nigeria (1990 2013). Donnish journal of economics and international nance, 1(1), 001- 006 Boschini A, Petterson J, Jesper R. Resource curse or not: A question of appropriability. Stockholm: Stockholm University Press. 2020;12-18. Clague C, Keeefer P, Knack S, Olson M. Contract intensive money: Contract enforcement, property rights, and economic performance. Journal of Economic Growth. 1995;4(2):185-211. Dipak, M. and Ata, M. (2020), The African manufacturing firm, an analysis based on firm studies in Sub-Saharan African. Taylor and Francis Ltd. Enebong, A. (2022), Manufacturing Association of Nigeria : Nigeria‟s imperative in the new world trade order, workshop report. African economic research consortium . Nairobi, Kenya and trade policy research and training . Department of economics, University of Ibadan. Jhinghan ML. Economics of development and planning. Delhi: Vrinda Publications; 2007. Kaldor N. Causes of the slow rate of growth of the United Kingdom. Cambridge: Cambridge University Press; 1966. Libanio G. Manufacturing industry and economic growth in Latin America: A Kaldorian approach. CEDEPLAR, Brazil: Federal University of Minas Gerais; 2021. Mazundar, D. and Mazaheri, A (2021), The African manufacturing firm: An analysis based on firm, studies in Sub-Saharan Africa. Taylor and Francis Ltd. Naudé, W., & Szirmai, A. (2021). The importance of manufacturing in economic development: past, present and future perspectives. UNU-MERIT. UNU-MERIT Working Papers No. 04 Ovat OO. Do industrial policies promote industrial development in developing countries evidence from Nigeria. Industrial Development: A Catalyst for Rapid Economic Growth. In Udoh E, Ogbuagu UR, Essia, Industrial Development: A Catalyst For Rapid Economic Growth. P.N Davision publications. Port Harcourt; 2011.

Manufacturing Sector Output and Economic Growth

Abstract

References

More Articles from INTERNATIONAL JOURNAL OF ECONOMICS AND FINANCIAL MANAGEMENT