Linkage Behaviour of Manufacturing Firms in Nigeria

Abstract

Postulations and investigations have shown that with strong connection to the global value chain theory, industrial upgrading at the national level necessitates a paradigm shift from ordinary assembly of imported inputs to a more sophisticated integrated forms of production that will require a more intensive use of both forward and backward linkages. This work employed Ordered Probit Framework and the findings revealed that manufacturing firms in Nigeria exhibit poor linkage with the local economy. The results show that firms in the country generally source their inputs from foreign sector. Only the size variable showed evidence of positive linkage with local suppliers. Policy drive should therefore be geared towards addressing obstacles that prevent firms in the country from patronizing local suppliers.