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Exchange Rate Volatility and the Performance of Manufacturing Sector in Nigeria (1981 – 2016)

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  • Ayobami, Ojeyinka Titus

Abstract

The study examined the effect of exchange rate volatility on the performance of manufacturing sector in Nigeria for the period of 1981 to 2016. Annual data were sourced from World Development Indicators of World Bank and Statistical Bulletin of the Central Bank of Nigeria. Based on the result of unit root test, an ARDL technique of estimation was employed. The result from Bounds Test for cointegration revealed the evidence of long-run relationship among manufacturing sector’s value added, exchange rate, exchange rate volatility, interest rate, inflation, import and gross capital formation. Findings from the study revealed that the impact of exchange rate volatility on manufacturing sector’s performance is positive and significant both in the long-run and short-run. In addition, the study found that the impact of exchange rate on manufacturing sector’s output is positive but not significant in the long-run while its impact is negative and significant in the short-run. Furthermore, the effect of import on manufacturing sector’s performance is negative and significant in the long-run and short-run.

Suggested Citation

  • Ayobami, Ojeyinka Titus, 2019. "Exchange Rate Volatility and the Performance of Manufacturing Sector in Nigeria (1981 – 2016)," African Journal of Economic Review, African Journal of Economic Review, vol. 7(2), August.
    • Handle: RePEc:ags:afjecr:292357
    DOI: 10.22004/ag.econ.292357
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    Cited by:

    1. Emmanuel Buabeng & Enock Kojo Ayesu & Opoku Adabor, 2019. "The Effect of Exchange Rate Fluctuation on the Performance of Manufacturing Firms: An Empirical Evidence from Ghana," Economics Literature, WERI-World Economic Research Institute, vol. 1(2), pages 133-147, December.
    2. Moyo, Delani & Tursoy, Turgut, 2020. "Impact of Inflation and Exchange Rate on the Financial Performance of Commercial Banks in South Africa," MPRA Paper 101383, University Library of Munich, Germany.
    3. Mohamed A.M. Sallam, 2021. "Determinants of Growth in Manufacturing Industries: Empirical Evidence from Egypt Using the ARDL Approach," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(3), pages 137-153.
    4. Dr. Zahid Hussain Shaikh & Ragni Lund & Dr. Niaz Hussain Ghumro, 2024. "Macroeconomic dynamics and Panel VAR -Analysis in Developing Countries," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 13(1), pages 118-126.

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