REFORM POLICIES, MANUFACTURING ENTREPRENEURIAL ACTIVITY AND ECONOMIC GROWTH: EMPIRICAL AND QUALITATIVE OBSERVATIONS ON NIG...
OUTLINE <ul><li>Introduction </li></ul><ul><li>Objectives </li></ul><ul><li>Research Questions </li></ul><ul><li>Reforms i...
INTRODUCTION <ul><li>When a great number of new businesses enter the market, competition and economic growth are enhanced....
OBJECTIVES/RESEARCH QUESTIONS   <ul><li>A reform-entrepreneurship-growth nexus is apparent.  </li></ul><ul><li>This paper ...
REFORMS IN NIGERIA <ul><li>In the mid-1990s the government introduced a series of reforms, including an allowance for grea...
FOCUS: ENTREPRENEURSHIP & MANUFACTURING   <ul><li>Particularly for operationalisation purposes, entrepreneurship is charac...
APPROACH   <ul><li>The data employed for our empirical analyses came mostly from two sources:  </li></ul><ul><li>The Natio...
FINDINGS <ul><li>GDP is significantly related to nearly all of the measures of entrepreneurial activity that were used. </...
FINDINGS (Contd.) * Correlation is significant at the 0.05 level 2-tailed. ** Correlation is significant at the 0.01 level...
FINDINGS (Contd.) Figure 1: Manufacturing firm entry (1980-2003)
FINDINGS (Contd.) Figure 2: Year-on-year trends in manufacturing firm entry rates (1980-2003)
FINDINGS (Contd.) Table 2: Regression of entrepreneurial activity variables on GDP     B SE t Sig. (Constant) -89.36 175.1...
CONCLUSION <ul><li>Our effort represents a very early and basic attempt at exploring the issues the way we have done and o...
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Policy reforms & entrepreneurship in Nigeria

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Policy reforms & entrepreneurship in Nigeria

  1. 1. REFORM POLICIES, MANUFACTURING ENTREPRENEURIAL ACTIVITY AND ECONOMIC GROWTH: EMPIRICAL AND QUALITATIVE OBSERVATIONS ON NIGERIA Egbetokun, A.A., Adelowo, C., Oladipo, O., Adepoju, A.O., Isola, O.O. & Olamade, O.O. National Centre for Technology Management (NACETEM), Federal Ministry of Science & Technology (FMST), Obafemi Awolowo University, Ile-Ife, Nigeria
  2. 2. OUTLINE <ul><li>Introduction </li></ul><ul><li>Objectives </li></ul><ul><li>Research Questions </li></ul><ul><li>Reforms in Nigeria </li></ul><ul><li>Focus: Entrepreneurship & Manufacturing </li></ul><ul><li>Approach </li></ul><ul><li>Findings </li></ul><ul><li>Conclusion </li></ul>
  3. 3. INTRODUCTION <ul><li>When a great number of new businesses enter the market, competition and economic growth are enhanced. </li></ul><ul><li>Business entry and density rates are significantly related to country-level indicators of economic development and growth (Klapper’s et al (2008). </li></ul><ul><li>Important among these country-level indicators are policy-related predictors & reforms (Jovanovic, 1982). </li></ul>
  4. 4. OBJECTIVES/RESEARCH QUESTIONS <ul><li>A reform-entrepreneurship-growth nexus is apparent. </li></ul><ul><li>This paper attempts to explore this relationship in the context of a large developing economy – Nigeria. </li></ul><ul><ul><li>How have the structural adjustment programme (SAP), the indigenisation decree and the small and medium enterprise equity investment scheme (SMEEIS) impacted entrepreneurial activity? </li></ul></ul><ul><ul><li>Is there any noticeable impact of the foregoing on economic growth? </li></ul></ul>
  5. 5. REFORMS IN NIGERIA <ul><li>In the mid-1990s the government introduced a series of reforms, including an allowance for greater foreign ownership in Nigerian industries, a loosening of controls on foreign exchange, and the establishment of an export-processing zone at Calabar (Stock, 2007). </li></ul><ul><li>In December 1999, Bankers’ Committee proposed that banks should contribute 10% of their profits. This fund formed the basis for the small and Medium Industries Equity Investment Scheme (SMIEIS). </li></ul><ul><li>The indigenisation decree which was promulgated in 1977. </li></ul><ul><li>The Structural Adjustment Programme (SAP). </li></ul>
  6. 6. FOCUS: ENTREPRENEURSHIP & MANUFACTURING <ul><li>Particularly for operationalisation purposes, entrepreneurship is characterised in this paper simply as the creation of a new enterprise or venture, whether in the formal or informal sector. </li></ul><ul><li>In today’s globalised world, manufacturing plays a key role in development. </li></ul>
  7. 7. APPROACH <ul><li>The data employed for our empirical analyses came mostly from two sources: </li></ul><ul><li>The National Bureau of Statistics (NBS, 2009); and </li></ul><ul><li>The Central Bank of Nigeria (CBN, 2004). </li></ul><ul><li>We implemented descriptive, correlation and regression analyses </li></ul>
  8. 8. FINDINGS <ul><li>GDP is significantly related to nearly all of the measures of entrepreneurial activity that were used. </li></ul><ul><li>Relationship exists between GDP growth and manufacturing firm entry. </li></ul>
  9. 9. FINDINGS (Contd.) * Correlation is significant at the 0.05 level 2-tailed. ** Correlation is significant at the 0.01 level 2-tailed. Table 1: Correlation of reform and economic growth variables, Nigeria (1980 - 2003)   1 2 3 4 5 6 7 8 GDP                 GDPGROWTH 0.429*               MANGDPGROWTH 0.102 0.412             NENTRY 0.840** 0.424* -0.059           NSLT10ENTRY 0.802** 0.398 -0.123 0.988**         PERCENTSLT10ENTRY 0.607** 0.281 -0.290 0.774** 0.822**       NENTRYTREND -0.025 0.276 -0.215 0.383 0.435* 0.430*     NSLT10ENTRYTREND 0.015 0.129 -0.367 0.391 0.453* 0.540** 0.953**   ICU -0.433* -0.059 0.367 -0.453* -0.488* -0.314 -0.125 -0.097
  10. 10. FINDINGS (Contd.) Figure 1: Manufacturing firm entry (1980-2003)
  11. 11. FINDINGS (Contd.) Figure 2: Year-on-year trends in manufacturing firm entry rates (1980-2003)
  12. 12. FINDINGS (Contd.) Table 2: Regression of entrepreneurial activity variables on GDP   B SE t Sig. (Constant) -89.36 175.18 -0.51 0.62 NENTRY 0.31 0.06 5.36 0.00 PERCENTSLT10ENTRY 4.55 4.46 1.02 0.32 NENTRYTREND -0.13 0.25 -0.53 0.60 NSLT10ENTRYTREND -0.14 0.53 -0.26 0.79 ICU 0.11 0.73 0.16 0.88 Adjusted R 2 0.760      
  13. 13. CONCLUSION <ul><li>Our effort represents a very early and basic attempt at exploring the issues the way we have done and our findings are consistent with current thinking on the subject matter. </li></ul><ul><li>Greater entrepreneurial activity generally means greater growth and that reforms targeted at economic revival should not choke entrepreneurship. </li></ul><ul><li>Increase in manufacturing firm entry would mean increase in GDP. </li></ul>

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