Factors Affecting Capacity Utilization Decisions in Nigeria: A Time Series Analysis.
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Date
2012
Authors
Mojekwu, J. N.
Iwuji, I. I.
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Abstract
This study examined the impact of some macroeconomic variables and power supply on the performance of the
Nigerian manufacturing sector, using ex-post facto research design. Secondary data were sourced from Central Bank
of Nigeria (CBN) statistical bulletin (2009) and other publications. The main findings of the study were that power
supply had positive and significant impact on capacity utilization while inflation rate and interest rate had negative
impact on capacity utilization. However, the impact of interest rate was significant at 5% level while lending rate
was insignificant. Time series data were analysed with the aid of e-views 5.0 econometric computer package using
least square multiple regression technique. The regression model explained 88.54% of the variation in capacity
utilization, after correcting for linearity, normality, auto-correlation and heteroscedascity. The study recommended
that the ongoing privatisation of Power Holding Company of Nigeria should be pursued with vigour and that the
policy thrust of single digit inflation and lending rates by CBN should be sustained. The government should also put
in place monetary and fiscal policies to create an enabling environment for the manufacturing sector, thereby giving
a boost to the economy as a whole.
Description
Staff publication
Keywords
Capacity utilization , Multiple regression , Co-integration , Autoregressive Model
Citation
Mojekwu, J. N. & Iwuji, I. I. (2012), Factors Affecting Capacity Utilization Decisions in Nigeria: A Time Series Analysis. International Business Research, vol. 5 (1).