Productivity, market structure and trade liberalization in Nigeria
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Date
2002-11-02
Authors
Adeola F. Adeni kinju
Louis N. Chete
Journal Title
Journal ISSN
Volume Title
Publisher
AERC
Abstract
This study investigates the relationship between trade liberalization and the market
structure and productivity performance of the Nigerian manufacturing sector. The study
uses firm-level panel data for the three years from 1988 to 1990, a period of considerable
liberalization in the country. The data cover 382 manufacturing firms. The study shows
that in general, the productivity level of Nigerian manufacturing is very low. This
reflects in part an outcome of years of industrialization strategy that stressed factor
accumulation rather than the efficiency with which factors are utilized. The findings
from the study show that sectors with a high component of local raw materials generally
performed better than those depending on imported inputs.
The study also shows that foreign ownership has an important bearing on firm
performance and foreign-owned firms generate positive spillover effects on the other
firms in the industry. Moreover, the findings support the current trade liberalization
effort of the government as we found that the policy of trade liberalization and the lowering
of average tariff rates open up the economy to foreign investment, the promotion of
manufactured exports impinges positively on total factor productivity in the Nigerian
manufacturing sector. However, the government needs to exercise some caution with
the pace of import liberalization, as import growth rate was found to have a negative
impact on productivity. While this may be a short-run phenomenon, the implication that
the pace of import liberalization proceeded too fast for domestic firms to cope with
Description
HC 502 .A 47 2009
Keywords
Free Trade - Nigeria , Industrial productivity - Nigeria , Manufacturing Industries Nigeria