Environmental Quality and Manufacturing Sector Output in Nigeria
- Oto-obong Friday Ekpe
- Aishatu Ogiri Ibrahim and Christiana Ihotu Oduh
- ( paper pages. 511-543 )
Abstract
This study examines the relationship between
environmental quality and manufacturing sector output in Nigeria, focussing on
the moderating role of government policy on ecological sustainability. Using
annual data from 1990 to 2023, the analysis employed Johansen cointegration
tests, Vector Error Correction Models (VECM), and Autoregressive Distributive Lag
(ARDL) with moderation analysis. The Johansen cointegration results indicate no
long-run equilibrium relationship between ecological footprint and
manufacturing value added, suggesting that environmental quality does not
consistently influence manufacturing performance over time. However, short-run
estimates reveal a significant negative effect of environmental degradation on
manufacturing output, while government policy exerts a positive impact.
Moderation analysis further shows that government policy partially moderates
the relationship, highlighting the potential of institutional interventions to
buffer the effects of environmental pressures. These findings imply that short-term
environmental shocks can disrupt manufacturing performance, emphasizing the
need for timely interventions. Policy recommendations include strengthening
environmental regulation enforcement, incentivizing cleaner production
technologies, integrating environmental objectives into industrial policy, and
institutionalizing periodic monitoring of manufacturing sub-sectors.
Citation
Oto-obong Friday Ekpe, Aishatu Ogiri Ibrahim and Christiana Ihotu Oduh.
2025.
"Environmental Quality and Manufacturing Sector Output in Nigeria"
The Nigerian Journal of Economic and Social Studies,
67 (3): 511-543.
