Transport Infrastructure and Industrial Sector Productivity in ECOWAS Region
Keywords:
Transport infrastructure, Industrial sector productivity, Road network, Cross-sectional autoregressive distributed lag (CS-ARDL), Panel data set
Abstract
The state of the ECOWAS road network serves as a discouragement to many foreign investors seeking to aid industrial development. Many foreign industries have ceased to operate, infant companies find it difficult to grow, and many private businesses are struggling to survive as a result of high production costs and shortages of skilled labour or industrial manpower. This is a result of poor road networks. Thus, this study looked at how road networks and transport infrastructure investments affected the productivity of the industrial sector in ECOWAS nations. The study adapted an endogenous growth model to analyse data sets for fifteen ECOWAS countries spanning the years 1975 to 2022. In order to evaluate panel causality and cross-sectional autoregressive distributed lag (CS-ARDL) models, data was obtained from the World Development Indicator (WDI). The results demonstrated that overall road network and transport infrastructure investment had both short-term and long-term positive and significant effects on industrial sector productivity. Also, a unidirectional causality was recorded between the road network and industrial sector productivity, and a feedback causal relationship was recorded between investment in transport infrastructure and industrial sector productivity. Consequently, governments and moguls in the production industry should prioritise transportation improvements as a critical strategy for enhancing industrial efficiency and competitiveness.
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African Development Bank Report (AfDB) (2020). African infrastructure development index 2019. https://www.afdb.org/en/documents/economic-brief-africa infrastructure development index aidi2020-july-2020 African Union (AU) (2014)
Akekere, J., Oniore, J. O., Oghenebrume, A. D., & Stephen, E. Z. (2017). Industrial sector growth and public infrastructure capital in Nigeria. Journal of Economics, Management and Trade, 19(4), 1–12.
Andreas, S. (2003). The impact of road infrastructure on productivity and growth: Some preliminary results for the German manufacturing sector. WZB Discussion Paper, FS IV 97-47
Antle, J. M. (2003). Infrastructure and aggregate agricultural productivity: International Evidence. Economic Development and Cultural Change, 31(1), (April): 609-619.
Azolibe, C. B., & Okonkwo, J. J. (2020). Infrastructure development and industrial se productivity in Sub Saharan Africa. Journal of Economics and Development, 22(1), 91-109.
Bimba, G., Moshood A., Adaeze, U. E., & Kanu, N. C. (2020). The impact of public infrastructure on industrialization. African Scholar Journal of Mgt. Science and Entrepreneurship, 18(7).
Canning, D., & Pedroni, P. (2009). Infrastructure and long-run economic growth, Centre for Analytical Economics, Cornell University, 09-99
Castañeda, E., & Shemesh A. (2000). Overselling globalization: The misleading conflation of economic globalization and immigration, and the subsequent. Backlash Social Sciences, 9(5), 61- 73
Chen, S., & Golley, J. (2014). Green productivity growth in China’s industrial economy. Energy Economics. https://doi.org/10.1016/j.eneco.2014.04.002
Chenery, H. B. (1960). Patterns of industrial growth. The American Economic Review, Chinese Municipalities, Mimeo. 2(1), 28-39
Chitkara, S., & Nagpal, C. (2017). A non-parametric index number approach to investigate linkages between manufacturing sector development and public infrastructure. The Journal of Industrial Statistics, 6(1), 1-14
Chudik, S. & Pesaran, A. (2015). Human capital development, infrastructural development and industrial sector productivity in Nigeria. Journal of Econometrics, 188(2), 393-420.
Chukwuebuka, B. A., & Jisike J. O. (2020). Infrastructure development and industrial sector productivity in Sub-Saharan Africa. Journal of Economics and Development, 22(1), 91-109
Demetriades, S., & Mamuneas, D. (2000). Infrastructure development and economic growth: An explanation for regional disparities in China? Journal of Comparative Economics, 29(1), 95-117.
De Palma, A., Lindsey, R., Quinet, E., & Vickerman, R. (2011). A handbook of transport economics: Edward Elgaronline Amazon.com, Publishing, Incorporated
Dumitrescu, E. I., & Hurlin, C. (2012). Testing for granger non-causality in heterogeneous panels. Economic Modelling, 29(4), 1450-1460
ECOWAS, (2020). Region-building in West Africa: Convergence and agency in ECOWAS, New Regionalisms Series. Typeset in Times New Roman by Newgen Publishing UK
Fujita, M., Krugman, P. R., & Venables, A. J. (2001). The spatial economy: Cities, regions, and international trade: MIT press.
Granger, C.W.J. (2003). Some aspects of causal relationships. Journal of Econometrics. https://doi.org/10.1016/S0304-4076(02)00148-3
Holtz-Eakin, D., Newey, W., & Rosen, H. S. (1988). Estimating vector autoregressions with panel data. Econometrica, 56(6), 1371- 1385.
Hurlin, C. (2005). Un test simple de l’hypothèse de non-causalitédans un modèle de panel hétérogène. Revue Economique, 56(3), 799–810.
Hurlin, C., & Venet, B. (2001). Granger causality tests in panel data models with fixed coefficients. Processed Paris University Paris, IX, 10 (2), 1–30.
Hurlin, C. (2007). Testing for granger non-causality in heterogeneous panels. Working paper, LEO, University of Orleans.
Im, K. S., Pesaran, M. H., & Shin, Y. (2003). Testing for unit roots in heterogeneous panels. Journal of Econometrics, 115(1), 53–74.
Khalid, A., Mita, B., Ahmer, Q. & Niaz, A. G. (2020). Transport infrastructure and industrial output in Pakistan: An empirical investigation, Research in Transportation Economics, 90(2), 101-118
Limao, L., & Venables, S. (2001). Testing for granger causality in panel data. Stata Journal,17(4), 972 - 984. Mesagan, E. P., & Ezeji, A. C. (2016). The role of social and economic infrastructure in manufacturing sector performance in Nigeria. Babcock Journal of Economics, Banking and Finance, 5(1):101-119.
Na, K. Y., Han, C., & Yoon, C. H. (2011). Network effect of transportation infrastructure: A dynamic panel evidence. Annals of Regional Science, 50(1), 265–274.
Nadabo, Y. S. (2003). Nexus between infrastructure development and manufacturing sector performance in Nigeria: The moderating role of institutional quality. Journal of Economics and Allied Research, 8(1), 253-274
Ogwo O. E., & Agu, G. (2016). Transport infrastructure, manufacturing sector performance and the growth of gross domestic product in Nigeria, Journal of Business and African Economy, 2(1). 1999-2011.
Oksana, S., & Irina, K. M. (2016). Transport infrastructure development performance. 6th Conference on Reliability and Statistics in Transportation and Communication, Riga, Latvia. Procedia Engineering 178 (17), 319 329
Orji, K. E., Worika, I. L., & Umofia, N. (2017). The impact of Infrastructural Development on Nigeria’s Industrial Sector. AFRREV 1(3), 47-58.
Piyapong, J. (2020). Impact of transport infrastructure investment on regional employment.Center for transport studies, Department of Civil and Environmental Engineering, Imperial College London, South Kensington, London
Roberts, J. (1987) Perfectly and imperfectly competitive markets. The new Palgrave: A dictionary of economics.Macmillan, New York.
Shobande, A. O. & Etukomeni C. C. (2016). Infrastructural investment and industrial growth: A private investment Led Approach, EJBE 6(2) 2016
Stephen, E. Z. (2017) Trade, infrastructure, and roadways in Europe and Central Asia: New Empirical Evidence, Journal of Economic Integration, 22(4), 723-747.
Sun J. (2018). Impact of transportation infrastructure on industrial structure. School of Economics and Management Beijing, University Beijing, China E3S Web of Conferences 5(2), 253-265
Weisbrod, G., & Grovak, M. (2010). Comparing Approaches for Valuing Economic Development Benefits of Transportation Projects. Transportation Research Record 164(2), 1–19
Venables, A., Laird, J., & Overman, H. (2014). Transport investment and economic performance: implication for project appraisal. London: Department for Transport.
World Bank. (2021). Nigeria economic report.World Bank. https://doi.org/10.1007/BF02315996
Published
2025-01-26
Section
Articles
