ECONOMIC LIBERALIZATION AND INDUSTRIAL SECTOR PERFORMANCE IN NIGERIA- A MARGINAL IMPACT ANALYSIS (Published)
Given the impact government policies can have on economic variables and activities, it is imperative for policy makers to know how such policy action determine the macroeconomic performance. Applying the marginal impact estimation technique with standard errors corrected for serial correlation on the dummy variable structural break model, this paper found that economic liberalization has a significant impact on performance of the Nigerian manufacturing, mining and quarrying, and power subsectors, respectively and the aggregate industrial sector. The interaction of the policy with trade openness and financial deepening dampened the performance of the manufacturing subsector while its interaction with labour force is growth enhancing. Also the interaction of the policy with energy consumption was negative but financial deepening and energy consumption has dampening effect on the performance of the mining and quarrying subsector. While it has enhancing impact on the aggregate industrial sector and was not significant on mining and quarrying and power subsectors, economic liberalization decreased the performance of the manufacturing subsector. Beside, financial deepening has mix impact on the performance of the industrial sector. While it has increasing impact on the aggregate industrial sector it impact on manufacturing performance is negative.
Keywords: Domestic production, Economic Liberalization, Energy consumption, Financial deepening, Industrial Sector