Globalisation and Its Impact on Food Processing Industry’s Export in the Nigerian Economy, 1990 – 2015

Abstract

The study investigated the impact of globalization on the food processing industry’s export performance in the Nigerian economy between 1990 to 2015. Export demand equation model was used to analyse the impact. Time series data was collected from 1990 to 2015. The data were fitted to Least Square Method Regression Model (OLS) for analysis. The long-run stability of the variables used was tested by making use of the unit-root test using the Augmented Dickey Fuller test. To know whether the variables used moved along the same path, this was tested by making use of the co-integration test by Johansen. To detect the speed of adjustment to equilibrium in case there is any sudden shock or destabilization of the equilibrium of the system, the error correction test was performed. The outcome of the test performed, based on the coefficients of the variables are as follows. The impact of globalization on the food processing export performance shows mixed results. For example, the coefficient of the foreign income carries a wrong sign. The same thing is with the openness coefficient; while some important variables such as import value of capital goods, and relative price shows positive result. The main outcome of the study is the fact that the food processing is far from benefiting from globalization. The major hindrances are: the production technology is still crude, competitive prices in the international market is still difficult to achieve.