Exchange rate fluctuations and manufacturing output: Stylized evidence in Nigeria
One of the key engines of growth in many countries is the manufacturing sector, whose performance is impacted by the movement of the local currency. The manufacturing sector also offers opportunities like increased commerce, innovation, competitiveness, increasing exports, and productivity, which wi...
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| Format: | Article |
| Language: | English |
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Simon Kuznets Kharkiv National University of Economics
2023-08-01
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| Series: | Управління розвитком |
| Subjects: | |
| Online Access: | https://devma.com.ua/journals/t-21-3-2023/exchange-rate-fluctuations-and-manufacturing-output-stylized-evidence-in-nigeria |
| _version_ | 1797205836404097024 |
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| author | O.R. Oladipo A. Onabote F. Adekanye O.J. Ogunjobi E. Folarin |
| author_facet | O.R. Oladipo A. Onabote F. Adekanye O.J. Ogunjobi E. Folarin |
| author_sort | O.R. Oladipo |
| collection | DOAJ |
| description | One of the key engines of growth in many countries is the manufacturing sector, whose performance is impacted by the movement of the local currency. The manufacturing sector also offers opportunities like increased commerce, innovation, competitiveness, increasing exports, and productivity, which will only be possible when exchange rate is in the form of currency appreciation. The purpose of this study, therefore, was to investigate the effect of exchange rate fluctuations on Nigerian manufacturing output. The Generalized Autoregressive Conditional Heteroscedasticity technique was used in the study in order to examine the exchange rate oscillations. The result of the model estimation revealed that there is no persistence of shocks in the volatility of the exchange rate in the Nigerian economy. The business cycle stylized facts were also used to examine exchange rate volatility and the result established that exchange rate is highly volatile and has a negative effect on manufacturing output in Nigeria. The Auto Regressive Distributed Lag Bounds test was used to establish the long-run relationship and the result showed that there is a long-run relationship between exchange rate and manufacturing output. The variance decomposition and Impulse Response function were employed and the result revealed that exchange rate fluctuation has a negative impact on manufacturing gross domestic product in Nigeria. In practice, based on the results of the study, it can be recommended to the monetary authorities to constantly monitor the exchange rate fluctuations in order to create policies that are well-informed and match the exchange rate to the actual needs of manufacturing sector in order to boost its output |
| first_indexed | 2024-04-24T08:57:27Z |
| format | Article |
| id | doaj.art-545ee18ed1fd44e7a5adca353e96b7ec |
| institution | Directory Open Access Journal |
| issn | 2413-9610 2663-2365 |
| language | English |
| last_indexed | 2024-04-24T08:57:27Z |
| publishDate | 2023-08-01 |
| publisher | Simon Kuznets Kharkiv National University of Economics |
| record_format | Article |
| series | Управління розвитком |
| spelling | doaj.art-545ee18ed1fd44e7a5adca353e96b7ec2024-04-16T06:29:33ZengSimon Kuznets Kharkiv National University of EconomicsУправління розвитком2413-96102663-23652023-08-012233242https://doi.org/10.57111/devt/3.2023.32100Exchange rate fluctuations and manufacturing output: Stylized evidence in NigeriaO.R. OladipoA. OnaboteF. AdekanyeO.J. OgunjobiE. FolarinOne of the key engines of growth in many countries is the manufacturing sector, whose performance is impacted by the movement of the local currency. The manufacturing sector also offers opportunities like increased commerce, innovation, competitiveness, increasing exports, and productivity, which will only be possible when exchange rate is in the form of currency appreciation. The purpose of this study, therefore, was to investigate the effect of exchange rate fluctuations on Nigerian manufacturing output. The Generalized Autoregressive Conditional Heteroscedasticity technique was used in the study in order to examine the exchange rate oscillations. The result of the model estimation revealed that there is no persistence of shocks in the volatility of the exchange rate in the Nigerian economy. The business cycle stylized facts were also used to examine exchange rate volatility and the result established that exchange rate is highly volatile and has a negative effect on manufacturing output in Nigeria. The Auto Regressive Distributed Lag Bounds test was used to establish the long-run relationship and the result showed that there is a long-run relationship between exchange rate and manufacturing output. The variance decomposition and Impulse Response function were employed and the result revealed that exchange rate fluctuation has a negative impact on manufacturing gross domestic product in Nigeria. In practice, based on the results of the study, it can be recommended to the monetary authorities to constantly monitor the exchange rate fluctuations in order to create policies that are well-informed and match the exchange rate to the actual needs of manufacturing sector in order to boost its outputhttps://devma.com.ua/journals/t-21-3-2023/exchange-rate-fluctuations-and-manufacturing-output-stylized-evidence-in-nigeriageneralized autoregressive conditional heteroscedasticityhodrick-prescott filtervolatilitybusiness cycleconsumer price index |
| spellingShingle | O.R. Oladipo A. Onabote F. Adekanye O.J. Ogunjobi E. Folarin Exchange rate fluctuations and manufacturing output: Stylized evidence in Nigeria Управління розвитком generalized autoregressive conditional heteroscedasticity hodrick-prescott filter volatility business cycle consumer price index |
| title | Exchange rate fluctuations and manufacturing output: Stylized evidence in Nigeria |
| title_full | Exchange rate fluctuations and manufacturing output: Stylized evidence in Nigeria |
| title_fullStr | Exchange rate fluctuations and manufacturing output: Stylized evidence in Nigeria |
| title_full_unstemmed | Exchange rate fluctuations and manufacturing output: Stylized evidence in Nigeria |
| title_short | Exchange rate fluctuations and manufacturing output: Stylized evidence in Nigeria |
| title_sort | exchange rate fluctuations and manufacturing output stylized evidence in nigeria |
| topic | generalized autoregressive conditional heteroscedasticity hodrick-prescott filter volatility business cycle consumer price index |
| url | https://devma.com.ua/journals/t-21-3-2023/exchange-rate-fluctuations-and-manufacturing-output-stylized-evidence-in-nigeria |
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