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Industrial Output and Economic Growth in Emerging Economies: Evidence from Nigeria

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  • Stephen Ebhodaghe Ughulu

Abstract

The importance of the industrial sector output in enhancing sustainable economic growth has long been documented given that the sector is generally perceived as the engine of growth in an economy. This notwithstanding, Nigeria seems not to have put in place appropriate policies and programs that would engender the desired industrial output growth. The main aim of the paper, therefore, is to examine empirically the relationships between industrial sector output and the sustainable economic growth of Nigeria for the period 1981 to 2018. In doing this, descriptive statistics, unit root and co-integration tests as well as long run and short run analyses were conducted using the error correction model (ECM) of the econometrics. The empirical results from these estimation procedures were quite revealing. For instance, there existed a positive relationship between industrial sector output and economic growth though this was weak considering the magnitude of effects. Capital expenditure and lending rate exerted negative relationships on industrial output and these tended to have accounted for the current low level of industrial activities in the country. The stability test carried out in the paper showed a significant structural stability, which affirmed that these results have called for appropriate policy options that would bring about the desired industrial sector output growth patterns. Hence, strengthening the industrial sector activities in Nigeria as well as streamlining capital expenditure and lending rate to enhance the sector’s output has become imperative. This is typically true as it is the only path that would lead to the enhancement of the industrial sector output and, invariably, the sustainable economic development that Nigeria desperately desires.

Suggested Citation

  • Stephen Ebhodaghe Ughulu, 2021. "Industrial Output and Economic Growth in Emerging Economies: Evidence from Nigeria," Applied Finance and Accounting, Redfame publishing, vol. 7(1), pages 32-43, February.
    • Handle: RePEc:rfa:afajnl:v:7:y:2021:i:1:p:32-43
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    References listed on IDEAS

    as
    1. Adenomon, Monday Osagie & Oyejola, Benjamin Agboola, 2013. "Impact of Agriculture and Industrialization on GDP in Nigeria: Evidence from VAR and SVAR Models," MPRA Paper 75268, University Library of Munich, Germany, revised 09 Jun 2013.
    2. Quaicoe, Alexander & Aboagye, Anthony Q.Q. & Bokpin, Godfred A., 2017. "Assessing the impact of export processing zones on economic growth in Ghana," Research in International Business and Finance, Elsevier, vol. 42(C), pages 1150-1163.
    3. Robert J. Barro, 1991. "Economic Growth in a Cross Section of Countries," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(2), pages 407-443.
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    More about this item

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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