The Nexus between Manufacturing Productivity and Economic Growth in Nigeria (1986-2018)
AbstractThe study examine the impact of manufacturing sector productivity on economic growth in Nigeria, using the error correction model approach. Findings from the study suggest that interest rate has a negative and insignificant impact on manufacturing sector productivity, but the R2 (R-square) value of 0.8277 shows that manufacturing sector productivity have a very good impact on economic growth. It indicates that about 82.77 per cent of the variation in manufacturing sector productivity is explained by macro-economic variables. Exchange rate was found to have negative and an insignificant impact on manufacturing sector productivity. However, total government expenditure was found to have a positive and a significant impact on manufacturing sector productivity; whereas, degree of trade openness was found to have a negative and insignificant impact on manufacturing sector productivity. The study recommend among other things that affordable and sustainable interest rates is implemented by Central Bank to ensuring that the loans to the manufacturing sector are within the reach of investors in the sector without any forms ambiguity. Keywords: Manufacturing sector, economic growth, Interest Rate, Nigeria
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