Investment in Technology and Export Potential of Firms in Southwest Nigeria
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Date
2011-02-03
Authors
Adeoti, John Olatunji
Journal Title
Journal ISSN
Volume Title
Publisher
African Economic Research consortium
Abstract
This study investigates investment in technology by firms in Southwest Nigeria, and
how technology investment-related factors affect the export potential of firms. Data
for the study was obtained from a survey of firms carried out between June and August
2008. The results demonstrate that investments in technology among the research
sample firms are dominated by imported technologies, and investments in technology
are not directly targeted at improving the export potential of firms. 84.4% of firms use
either completely foreign technology equipment or equipment that are largely foreign
technology. No firm uses completely locally fabricated production facility. Foreign
direct investment in manufacturing is rare, and technology collaboration is largely in
the form of technical support agreement and technology licensing. The application of
ICT is most pronounced in customer relations management and office automation, while
only 30% of the sample firms have invested in equipment/machines with computer aided
manufacturing function. Only about 10% of the respondents consider improvement of
export capacity a most important motive for technology investments. The results also
demonstrate that firm size has a strong positive relationship with export potential, and it
is the most important factor that affects the export potential of firms. The coefficient of
firm size is the only parameter estimate that is consistently statistically significant at 1%
level for all four export models estimated. Other technology investment-related factors
that impact positively on export potential include skills intensity ratio, investment in
skills upgrading, and investment in quality management.