Effects of industrialization on Tanzania’s economic growth: a case of manufacturing sector
Abstract This article examines the impact of industrialization on economic growth in Tanzania focusing on the drivers of structural changes in the manufacturing sector. We apply the vector error correction model based on a parsimonious model covering the period from 1970 to 2017. Our results demonst...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
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SpringerOpen
2022-12-01
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| Series: | Future Business Journal |
| Subjects: | |
| Online Access: | https://doi.org/10.1186/s43093-022-00177-x |
| _version_ | 1797669546209837056 |
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| author | Eunice Jonathan Lugina Adam Beni Swebe Mwakalobo Francis Lwesya |
| author_facet | Eunice Jonathan Lugina Adam Beni Swebe Mwakalobo Francis Lwesya |
| author_sort | Eunice Jonathan Lugina |
| collection | DOAJ |
| description | Abstract This article examines the impact of industrialization on economic growth in Tanzania focusing on the drivers of structural changes in the manufacturing sector. We apply the vector error correction model based on a parsimonious model covering the period from 1970 to 2017. Our results demonstrate the existence of a positive relationship between the manufacturing sector through its value added and economic growth in Tanzania. We have also observed a similar pattern of relationship in other sectors of the economy such as construction, agriculture, and services. Furthermore, the interaction model shows that foreign direct investment inflows and net domestic credit are the drivers of manufacturing growth. However, the real exchange rate coefficient is negative and significant, suggesting that it has had a negative impact on manufacturing output. The results are consistent with postulations of economic models found in economic growth theories. The article also presents some policy implications regarding the need for consistent policy implementation in the manufacturing sector and further improvement of the investment climate. |
| first_indexed | 2024-03-11T20:45:59Z |
| format | Article |
| id | doaj.art-000bba081df547d68f4e18fab93019bb |
| institution | Directory Open Access Journal |
| issn | 2314-7210 |
| language | English |
| last_indexed | 2024-03-11T20:45:59Z |
| publishDate | 2022-12-01 |
| publisher | SpringerOpen |
| record_format | Article |
| series | Future Business Journal |
| spelling | doaj.art-000bba081df547d68f4e18fab93019bb2023-10-01T11:17:16ZengSpringerOpenFuture Business Journal2314-72102022-12-018111110.1186/s43093-022-00177-xEffects of industrialization on Tanzania’s economic growth: a case of manufacturing sectorEunice Jonathan Lugina0Adam Beni Swebe Mwakalobo1Francis Lwesya2University of DodomaDepartment of Economics and Statistics, The University of DodomaDepartment of Business Administration and Management, The University of DodomaAbstract This article examines the impact of industrialization on economic growth in Tanzania focusing on the drivers of structural changes in the manufacturing sector. We apply the vector error correction model based on a parsimonious model covering the period from 1970 to 2017. Our results demonstrate the existence of a positive relationship between the manufacturing sector through its value added and economic growth in Tanzania. We have also observed a similar pattern of relationship in other sectors of the economy such as construction, agriculture, and services. Furthermore, the interaction model shows that foreign direct investment inflows and net domestic credit are the drivers of manufacturing growth. However, the real exchange rate coefficient is negative and significant, suggesting that it has had a negative impact on manufacturing output. The results are consistent with postulations of economic models found in economic growth theories. The article also presents some policy implications regarding the need for consistent policy implementation in the manufacturing sector and further improvement of the investment climate.https://doi.org/10.1186/s43093-022-00177-xIndustrializationEconomic growthManufacturing sectorParsimonious model |
| spellingShingle | Eunice Jonathan Lugina Adam Beni Swebe Mwakalobo Francis Lwesya Effects of industrialization on Tanzania’s economic growth: a case of manufacturing sector Future Business Journal Industrialization Economic growth Manufacturing sector Parsimonious model |
| title | Effects of industrialization on Tanzania’s economic growth: a case of manufacturing sector |
| title_full | Effects of industrialization on Tanzania’s economic growth: a case of manufacturing sector |
| title_fullStr | Effects of industrialization on Tanzania’s economic growth: a case of manufacturing sector |
| title_full_unstemmed | Effects of industrialization on Tanzania’s economic growth: a case of manufacturing sector |
| title_short | Effects of industrialization on Tanzania’s economic growth: a case of manufacturing sector |
| title_sort | effects of industrialization on tanzania s economic growth a case of manufacturing sector |
| topic | Industrialization Economic growth Manufacturing sector Parsimonious model |
| url | https://doi.org/10.1186/s43093-022-00177-x |
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