Some effects of trade liberalisation on Cameroonian manufacturing export performance (original) (raw)
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Industrialization of the Manufacturing Sector and Trade Opening in Cameroon
In this paper, the authors investigate the effect of trade opening on the industrialization of the manufacturing sector in Cameroon using the error correction model. The study uses data from the World Bank in the period 1967-2007. Our findings show that the long-term relationship between trade opening and industrialization of the manufacturing sector is not stable and that trade opening negatively affects the manufacturing sector of Cameroon. This result is explained by the fact that importations of some food products and inputs cannot be reduced. Moreover, Cameroon manufacturing enterprises are apparently unable to satisfy domestic demand.
2002
Analysis of the operation of the manufacturing sector in connection with trade liberalization is important. It helps to see what impacts (positive or adverse) has happened following the change in trade regime and envisages what action to take in the future. Review of trade related policy measures and assessment of the extent of liberalization are made using some indicators. Both econometric and descriptive techniques are also applied to investigate the operation of the manufacturing sector and the association between measures of productivity and some indicators of liberalization. The results indicate that manufacturing output, value added, capital expenditure and sales have increased after the reform when compared with the pre reform situation. Share of manufacturing export, however, depicted a declining trend after 1995/96. There is also an increase in the number of firms though manufacturing employment has not shown significant changes between the two periods. The increase in output that observed after the reform is mainly attributed to the performances during the initial periods of the trade reform than being the whole period phenomena. Only a minor increase in productivity has been observed in the post reform period. Increased competition across domestic firms and fall in parallel market premium are found to affect the productivity of the manufacturing sector positively, while the effect of change in relative prices (measured by ratio of effective exchange rates) is not significant. Size of the different sector also has an implication on efficiency. The observed results, in general, imply that strengthening domestic competition by encouraging entry and liberalizing the foreign exchange market with accompanied trade policy adjustment has impacts on the performance of the manufacturing sector. Emphasizing the role of prices alone is not, however, sufficient to bring the intended changes in productivity.
TRADE LIBERALIZATION AND ECONOMIC GROWTH: AN ASSESSMENT OF NIGERIAN EXPERIENCE
The association between trade liberalization and economic growth in Nigeria was examined in this study from 1981 to 2018. The study used the Autoregressive Distributed Lag Bounds technique to cointegration. The results showed that trade liberalization do not support economic growth in Nigeria. Hence, the genuineness of the extensive trade liberalization campaign in developing countries through the bright idea of international organizations in the late 1980s and early 1990s was not validated. Furthermore, the results showed the presence of unidirectional causality from real Gross Domestic Product to trade liberalization in Nigeria. The study, therefore, recommends that policymakers of the government should balance its strategies of trade liberalization as a result of the inability of the economy to absorb the adverse shocks from foreign trade, appropriate fiscal and monetary policies should be deployed by the government for the protection of the economy against foreign influences and the diversification of the structure of export is necessary to ensure that manufactured products are exported more. Also, the Central Bank of Nigeria and policymakers of the government should prescribe sound macroeconomic policies that will ensure price stability to reduce the uncertainties associated with investment in the economy to boost economic growth. The government should also provide incentives to investors and a conducive environment for investment. Moreover, the government should initiate policies of growth for the promotion of trade. Contribution/ Originality: This study established a fact-based decision making for the realization of a trade-led economic growth and development strategies in Nigeria through the direction of causality between the principal variables. This study has deep evidence of originality; hence, the validity, reliability and uniqueness are not in doubt.
Trade liberalization – Industrialization nexus; a case study of the nigerian economy
2021
This paper explores trade liberalization- industrialization nexus in the Nigerian Economy. Both long-run and short-run relationships between these variables were explored. The study spanned through 1981- 2016. The study applied the pre-estimation tests, such as the unit root test, the optimal lag length selection test was performed to ensure the appropriate lag length for the individual annual data series. The Vector Error Correction Model (VECM) analysis was applied following the result of the co-integration test and the pair-wise Granger causality tests was applied to investigate the causal relationship between trade liberalization and industrialization in the Nigerian economy. The results from the VECM analysis revealed a unidirectional long-run causal relationship between trade liberalization and industrialization; but no short run causal relationship between the variables. The pair-wise Granger-causality test result revealed that there was no short run Granger-causal relationsh...
Advances in Management and Applied Economics, 2021
Using quarterly data between 1981q1 and 2018q4, the paper investigates the relationship between trade liberalization and economic growth in Nigeria. Exploring Johnasen cointegration technique and the Vector Error Correction (VEC) method, the paper considers three alternative measures of trade liberalization to determine whether the response of economic growth to trade liberalization is sensitive to the choice of the indicators of trade liberalization under consideration. The paper finds significant effects of trade liberalization on the economy. The paper recommends that government should implement policies that will promote trade openness in Nigeria. This may be achieved by establishing bilateral and multi-lateral agreements that are favourable and that will support appropriate technology transfer to domestic producers. JEL classification numbers: F31, F13, F41. Keywords: Trade liberalization, Tariffs, Economic growth, Nigeria.
Effect of Trade Liberalization on Economic Development in Nigeria, 1980-2013
2016
The study explores the relationship between trade liberalization and economic growth in Nigeria. Two equations were estimated in which index of industrial production proxied as yearly average capacity utilization as a function of degree of openness, terms of trade and real export. Similarly, in the second equation, real gross domestic product as a function of degree of openness, terms of trade, real export and trade liberalization dummy was estimated. A vector error correction model was employed for the study in which results show that openness of the foreign sector and trade liberalization dummy have positive significant impact on both industrial performance and economic growth in Nigeria within the period under review. The paper therefore recommended for the removal of all known impediments to trade such as excessive import levies and arbitrary tariffs.
Does Trade Liberalisation Hurt Nigeria’s Manufacturing Sector?
International Journal of Economics and Finance, 2016
This study examines the role of trade liberalization in the growth of manufacturing output in Nigeria, focusing on the short to medium term period while not ignoring the very important long term on which most studies have focused. Data for the period 1980 to 2013 were obtained from CBN and WDI, with which parameter estimates were extracted for the short to medium term using the error correction mechanism. Trade liberalization was found to hurt manufacturing output in the short run although it showed a real potential to boost it in the long term. An overhaul of competition policy was recommended with a view to establishing Neutral Status in manufacturing export trade.
Manufacturing Sector and Trade Liberalization in Ethiopia
2002
Analysis of the operation of the manufacturing sector in connection with trade liberalization is important. It helps to see what impacts (positive or adverse) has happened following the change in trade regime and envisages what action to take in the future. Review of trade related policy measures and assessment of the extent of liberalization are made using some indicators. Both econometric and descriptive techniques are also applied to investigate the operation of the manufacturing sector and the association between measures of productivity and some indicators of liberalization. The results indicate that manufacturing output, value added, capital expenditure and sales have increased after the reform when compared with the pre reform situation. Share of manufacturing export, however, depicted a declining trend after 1995/96. There is also an increase in the number of firms though manufacturing employment has not shown significant changes between the two periods. The increase in outp...
Empirical Analysis of Trade Liberalization and Economic Growth in Nigeria, 1980-2013
2018
: The trade liberalization is necessary and has positive effects for development , and on the growth performance of the industrial sector , constitute d an increasingly controversial issue. The origin of trade liberalization and market-oriented economic reform in many developing countries began in the early 1980s and intensified in the 1990s. The reform takes various forms in terms of ownership and contents in different countries. The paper accesses the impact of trade liberalization on economic growth in Nigeria for the period 1980-2013. Two equations were estimated : first ly, made index of industrial production as a function of trade openness, terms of trade , and real exports ; and, second ly, equation made real gross domestic product as a function of trade openness, terms of trade, real export , and trade liberalization dummy. The study employs a vector error correction model , quantitative method, and economics approaches. The results show that openness of the foreign sector a...