NEXUS BETWEEN INFRASTRUCTURE DEVELOPMENT AND MANUFACTURING SECTOR PERFORMANCE IN NIGERIA: THE MODERATING ROLE OF INSTITUTIONAL QUALITY

Abstract

The role of infrastructure development in the manufacturing growth process is recognized in the literature and policy cycles, therefore, what determines it is also worthy of attention. This study investigates the relationship between infrastructural development and manufacturing sector performance in Nigeria: the moderating role of institutional quality. To accomplish this objective, the study employs an Autoregressive distributed lag (ARDL) from (2002–2021). The results show that institutional quality in Nigeria has a negative impact on manufacturing sector performance both in the short run and long run. The study reveals that productive infrastructure development is positively and significantly improving manufacturing sector performance in Nigeria.  In general, institutional quality is introduced to improve the influence of infrastructural development on manufacturing sector performance. Furthermore, the study presents a perspective on the role of government in establishing an enabling environment that promotes infrastructural development. and, as a result, enhances manufacturing sector performance in Nigeria. Based on this finding, the study recommends the implementation of measures and policies aimed at encouraging productive infrastructural development that contributes to manufacturing sector performance in Nigeria. In addition, government and policymakers should improve the quality of institutions such as improving Government Effectiveness, Political Stability, Absence of Violence, Voice and Accountability, Regulatory Quality, Rule of Law, and Control of Corruption.