Effect of Oil Price Fluctuations on Manufacturing Performance in Nigeria (2009-2017)
Journal Title: IOSR Journal of Economics and Finance (IOSR-JEF) - Year 2018, Vol 9, Issue 6
Abstract
Oil is one of the most important raw materials for industrial production, and changes in its price affect both prices o f petroleum products and the overall production costs. The debate on the nexus between oil price and manufacturing performance is far from over considering the dynamic nature of the oil market. This paper examined the effect of petroleum price on manufacturing performance (output) in Nigeria from 2009Q1 to 2017Q4. Manufacturing Performance (MPER), Oil Price (OP), Exchange Rate (EXC) and Interest Rate (INT) were the variables of interest and analyzed using Auto regressive Distributive Lag (ARDL) approach. It was found from the bound test that, the variables are co integrated. The findings revealed that oil price has a positive and statistically significant impact on manufacturing output. Furthermore, exchange rate and interest rate were negatively related to manufacturing output at 5% significant level. Therefore, the paper recommends setting a framework that will yield stable and affordable exchange rate and interest rate regimes for manufacturing firms. Steady supply of petroleum product raises the performance of the manufacturing sector; and government should encourage the use of local raw materials and contents in productions oas to ease the operations of manufacturing firms and increase their performance.
Authors and Affiliations
Gummi U. M. , Adamu Hassan, Asiya Mu’azu
Keywords
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- EP ID EP430889
- DOI 10.9790/5933-0906047180.
- Views 385
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