Author(s): D. Salami & I. Kelikume
This paper estimates the linkage between the manufacturing sector and other
sectors of the Nigerian economy with the aid of a more dynamic estimating tool.
The paper departs from the static Leontief’s input-output framework used by
earlier studies and adopts the Granger causality test and the vector auto
regression method, to determine the impact of changes in manufacturing output
on the output of the other sectors and the effects of changes in output of other
sectors on the manufacturing sector.
Using quarterly time series data over the
periods 1986 to 2010 the result shows a weak linkage between the manufacturing
sector and other sectors of the Nigerian economy.
The manufacturing sector
output showed no causal relationship with real economic activities as measured
by the real gross domestic product.
It also had no causal relationship with the
financial sector output.
Only two major sectors building and construction and
hotel and restaurant seems to be driving the manufacturing sector with the later
exhibiting a bi-directional relationship with the manufacturing sector.
Specifically, it takes approximately four to six quarters for most sectors to
respond to the impact of shocks emanating from the other sectors the economy.
manufacturing sector, sectorial linkage, vector autoregression,
granger casualty, real gross domestic product.
The manufacturing sector makes significant contribution to economic
development through its income and employment linkages with other sectors of
the economy in both developing and developed countries.
Prior to the twenty...
Size: 2,968 kb
Paper DOI: 10.2495/SDP110571
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