Globalisation and manufacturing sector performance: the role of institutional quality in Nigeria

Abstract

This study examined the relationship between globalisation and Nigeria's manufacturing sector performance and how institutional quality is moderating this relationship during the period 2000-2020. The autoregressive distributed lag (ARDL) estimation technique was used. The findings indicate that globalisation has a direct positive impact on manufacturing sector performance in Nigeria, both in the short and long run. The institutional indicators predominantly showed a negative direct effect on manufacturing sector performance, both in the short and long run. Interestingly, the interaction between globalisation and the institutional indicators showed that the weak institutions prevalent in Nigeria are yet to dampen the positive effect of globalisation on the nation's manufacturing sector. Furthermore, when the components of globalisation were used in the analysis, we found that while political and social globalisation enhance the performance of Nigeria's manufacturing sector, economic globalisation deters it. The study gave some policy recommendations based on the findings.