Manufacturing Economic Value Creation and Economic Development
DOI:
https://doi.org/10.56830/IJAMS07202204Keywords:
Economic Development, Manufacturing sector, Value Creation, Value added, Fully Modified OLSAbstract
In Nigeria, firms specifically manufacturing firms lack sufficient ability to innovate in order to create value and add value to expand their operation to bring about expansion and economic progress because there is no conducive environment for them to operate. Against this background, this study examined manufacturing economic value creation and economic development in Nigeria. The study specifically, analyses the trend of manufacturing economic value creation, estimates the relationship between manufacturing economic value creation and economic development and analyse the direction of causality relationship between manufacturing economic value creation and economic development in Nigeria. The secondary data for the analysis were collected from World Bank Development Index (WDI). The data were analysed using the Fully Modified Ordinary Least Squares (FMOLS) method and Granger causality test while normality test, correlation analysis and unit root test were conducted as a preliminary evaluation of the data collected. The result of the fully modified OLS indicates that value creation (β =0.629402, t=10.27719 & p<0.05) and greenhouse gas emission (β=0.114513, t=3.108018 & p<0.05) exert a significant positive effect on economic development in Nigeria while the coefficient of manufacturing capacity utilisation (β=0.064705, t=1.054548, p>0.05) indicates that manufacturing capacity utilisation does not have a significant effect on economic development in NigeriaThe study concluded that value creation has a significant positive effect on economic development in Nigeria. among others, the study recommends the need for government to ensure that policy or programmes on manufacturing should be aimed at improving their capacity to create value by providing a conducive environment that help to improve performance in the Nigerian manufacturing industry
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