This study evaluates the Nigerian enterprise sector and policy uncertainty using the World Bank enterprise survey data for Nigeria 2010. Using the multinomial logistic regression model and the multivariate analysis to specifically analyze the impact of policy uncertainty on the enterprise sector and the factors that have influenced the growth of the Nigerian enterprise sector, the findings show that tax rate, customs and trade regulations and macroeconomic environment have impacted on the medium and large enterprise sector positively. The findings also showed that in the small enterprise sector, labour regulation, licensing and permits, policy uncertainty and political instability have negative impact on the medium and large sector enterprise sector in Nigeria. Meanwhile, electricity, unskilled workforce, cost of finance, practice of competitors, power outages and cost of raw materials or intermediate goods all have positive influence the growth of the Nigeria enterprise sector. The study recommends that proper macroeconomic environment, strong institutions, good leaderships and infrastructures will both enhance public and private sector productivity for economic competitiveness.Contribution/ Originality: This study contributes in the existing literature. This study is one of very few studies which have investigated policy uncertainty and enterprise sector, and factors affecting it. The paper contributes the first logical analysis, using superior data and methodology to other studies, that policy uncertainty affects Nigerian enterprise sector.
Motivated by the prevalence of misleading inference in time series occasioned by failure to account for structural breaks in series as volatile as oil price in Nigerian specific studies, this study sought to find out whether structural breaks matter in studying the response of inflation to oil price shocks. The study employed Zivot-Andrews unit root test with structural break to compare the unit root result with the conventional ADF result while the local projection impulse response function (LPIRF) was used to determine the response of inflation dynamics to oil price shocks in Nigeria from 1981 to 2016. The unit root test shows that failure to account for structural break in unit root of a volatile series can produce wrong inference. The LPIRF results suggestedthat inflation responds significantly to oil price shocks and that there exists a higher persistence level of oil price shocksin exchange rate than inflation. Furthermore, the counterfactual result conditioned on global oil market behavior shows that inflation responds significantly to oil price due to global oil market behavior.
ABSTRACT:In an attempt to find out the degree of monetary non-neutrality in Nigeria we started from finding out the size of price rigidity in the country. Computation with Ball and Romer method showed that price rigidity is optimal decision for firms in Nigeria only when the menu cost is well above 2.28% of the firm's revenue which is on the high side, showing the likelihood of weak price rigidity in the country. Confirming this, the IRFs of the SVAR shows that the response of inflation to nominal shock has only one period lag. These combined results led to a small though persistent response of output to the nominal shock. The result of the study therefore points towards large nominal and small real effect of monetary policy in Nigeria and conclude that monetary policy will be a better option for contractionary plan but not for an expansionary plan.
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