Impact of industrialisation on economic growth in Nigeria

Abstract

Orientation: The industrial sector contributes to the growth of other sectors of the economy. Despite the number of industries in various sectors of the economy, inclusive economic growth is still not met in Nigeria.Research purpose: This article examines the impact of industrialisation on the growth of Nigeria’s economy.Motivation for the study: There exists a divergence in the results of the existing empirical investigations conducted on Nigeria in comparison with other developing economies.Research approach/design and method: The Johansen co-integration and Granger causality tests are utilised to determine the long-term relationship and causality among variables.Main findings: Industrial output has a significant direct effect and an aggregate effect of 86% on the real gross domestic product (GDP). A unidirectional causal impact of industrial output on real GDP was also established.Practical/managerial implications: Fund managers, international traders, policymakers and designers of business strategies and policies should take note of the dynamics of Nigerian industrialisation. This study recommends that government should encourage more foreign direct investment through the adoption of industrialisation policies such as tax holidays, provision of land for industrial uses to foreign investors and also ensuring that the lending interest rate for the real sector is lowered during low production to stimulate growth in the sector. The government should also increase electricity supply, ensure green industrialisation, encourage renewable energy consumption and control the exchange rate that may stimulate industrialisation and increase growth of the economy.Contribution/value-add: This article contributes to existing economic development literature by filling the gap related to the dynamic effect of industrialisation on the Nigerian economy.

The Impact of Industrialization on Economic Growth in Tonga

“…This study supports the findings of Lugina et al (2022), who found that industrialization helps European and East Asian economies grow. The findings of this study are also consistent with previous studies that show that industrialization has a positive and significant relationship with economic growth (see Ibitoye et al, 2022;Yangailo & Chambani, 2023;Lugina et al, 2022;Bokosi, 2022;Wang & Su, 2019;Su & Yao, 2017). This finding contradicts previous research studies that found a negative relationship between industrialization and economic growth (Iheoma & Jelilov, 2017;Ibbih & Gaiya, 2013).…”

“…This is due to conflicting findings on the nature of the relationship that exists between economic growth and industrialization. Some studies have found that industrialization has a positive impact on economic growth (Yangailo & Chambani, 2023;Lugina et al,2022;Bokosi, 2022;Ibitoye et al,2022;Wang & Su, 2019;Su & Yao,2017), while others have not (Iheoma & Jelilov, 2017;Ibbih & Gaiya, 2013;Jelilov et al, 2016). This study was the first to be conducted in the Tongan context.…”

“…The empirical results show that an increase in industrialization is positively associated with economic growth in both the short and long run. Ibitoye et al (2022) used Johansen cointegration and Granger causality tests to examine the impact of industrialization on economic growth in Nigeria. The results showed a positive and statistically significant relationship between industrialization and economic growth.…”

“…According to Yangailo and Chambani (2023), Lugina et al (2022), Bokosi (2022), (Ibitoye et al (2022), Wang and Su (2019) and Su and Yao (2017), industrialization has a positive and significant impact on economic growth.Therefore, we propose the following:…”

The Impact of Industrialisation on Zambia’s Economic Growth

“…On the other hand, there have been conflicting results regarding the nature of the association that exist between economic growth and industrialisation. Some studies have presented that industrialisation has a positive effect on economic growth (Ibitoye et al,2022;Lugina et al,2022;Su & Yao,2017;Wang & Su,2019). Whereas other research studies have not found any positive relations between industrialisation and economic growth (Ibbih & Gaiya,2013;Iheoma & Jelilov,2017;Jelilov et al, 2016).…”