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Impact of Trade Policy Reforms on Manufacturing Firms’ Performance in Nigeria

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Abstract

The pivotal role of the manufacturing sector in guaranteeing a relatively sustainable growth and generating employment has made both public and private actors take interest in factors that might influence manufacturing performance; trade policy reforms inclusive. Consequently, policy makers and the government has taken steps to influence manufacturing performance through trade policy reforms, in form of tariff reduction. The paper examined the impact of trade policy reforms on manufacturing firms’ performance in Nigeria. Panel data were collected for 57 quoted firms in Nigeria across 15 manufacturing industries. The fixed and random effects models were examined, while the Hausman specification test judged the random effects model to be the most appropriate. Chow break-point test also suggested the existence of structural break, and hence, the break was controlled for. The findings reveals that tariff has significant negative impact on manufacturing firms value added (performance) in Nigeria. The negative impact of tariff is however, much obvious in the printing and publishing and aluminium industries/ sub-sectors. We therefore, recommend that selective imposition of tariff on different products at different time should be implemented in conjunction with sector-specific reforms for enhanced manufacturing performance in Nigeria.

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  • Folorunso Oshodi, Ayodele & Aremu Muhammed, Ismail, 2020. "Impact of Trade Policy Reforms on Manufacturing Firms’ Performance in Nigeria," Working Papers 1, Department of Economics, University of Ilorin.
    • Handle: RePEc:ris:decilo:0001
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    Keywords

    manufacturing; trade policy; economic growth; industrialisation;
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