Sector Output Research Articles

Estimating the Impact of Sectoral Output on Employment for Nigeria Economy (1981-2021)

The purpose of this research is to determine the employment effects of contributions to GDP by the main sectors in the context of Nigeria and to understand the relative importance of each sector. This study investigates the contributions of the three broad sectors of the economy to total employment over the period 1981 to 2021 using the autoregressive distributed lag (ARDL) technique. Sectoral output was proxied by agricultural GDP, industry GDP and services GDP respectively while employment was measured by total number of employed persons. The Bounds test signaled the existence of cointegrating relationships between the series at both aggregated and disaggregated levels, necessitating both short and long run analysis for the study. The best performing sector in terms of employment intensity is the agricultural sector suggesting its labour-intensive nature. The impact of growth in industrial sector on employment appears to be a case of jobless growth while the impact of increases in service sector GDP on employment appears to be more like the case of job-loss growth. The agricultural sector supports growth-led employment for Nigeria while the service sector negates it. The service and industry sectors have low labour absorption capacity as the former is technology-driven while the latter is capital-intensive. The government should as a matter of urgency improve on its provision of finance and other support services to the agricultural sector. It is also necessary to devise verifiable methods to attract the teeming young population to actively participate in the agricultural sector with a view to developing its value chain. A growing service sector and a shrinking agricultural sector can only at best perpetuate the already challenging unemployment situation in Nigeria. The government should conduct an audit of the country’s agricultural sector for an in-depth understanding of the needs and then prioritise these needs in public expenditure allocations while ensuring that targeted funds get to those who are active farmers.

Long-run Relationship between Power Consumption and Manufacturing Sector Output in Nigeria

Power remains the engine of growth of every economy while the manufacturing sector remains the key driver of a transformed modern economy. Despite several power sector reforms, Nigeria’s manufacturing sector continued to underperform. This study focused on examining the long-run relationship between power consumption and manufacturing sector output in Nigeria. We estimated an ARDL model based on the bounds-testing approach to cointegration. Our results indicate that manufacturing sector output and electricity consumption are cointegrated and that short-run deviations from equilibrium are corrected up to 83 per cent annually. The result showed that power consumption is positively related to manufacturing sector output. This implies that improved power sector will stimulate manufacturing sector growth. Our result also showed that capital formation, labour force and private sector credit are positively related to the manufacturing sector while the monetary policy rate is negatively related to the manufacturing sector. Given our findings, we recommend that the government should implement a sustainable power sector reform that prioritizes the manufacturing sector. This will stimulate growth, reduce the cost of energy and indirectly reduce price of manufactured products. We equally recommend creating a conducive environment for investment in the manufacturing sector through favourable monetary policy rates to allow manufacturers access to credit.

How do sectoral elasticities affect the transmission of monetary shocks?

PurposeThe presence of heterogeneity in price stickiness has been previously shown to be the main determinant of the real effects of nominal shocks. The paper presents theoretical results that highlight the significance of labor mobility and intratemporal elasticity of substitution across sectors.Design/methodology/approachThis paper explores output dynamics in a closed economy, relying on a New Keynesian model that accounts for heterogeneity in price stickiness across sectors.FindingsThe key finding from the analytical results is that changes in labor mobility and intratemporal elasticity of substitution across sectors have an equivalent impact on sectoral output when accounting for differences in price stickiness. The model is then calibrated for the US economy using data from the manufacturing and services sectors, providing validation for the analytical results.Originality/valueConventional models often assume either immediate labor reallocation across sectors following shocks or no labor mobility at all. Additionally, these models assume either strong complementarity in consumption or some degree of substitutability. This paper demonstrates the crucial role that labor reallocation and the elasticity of substitution across goods across sectors play in generating well-known economic outcomes.

EMPIRICAL ESTIMATION OF THE POTENTIAL ECONOMIC IMPACT OF TOURISM PROMOTION POLICY IN ALGERIA

Objective: The objective of this paper is to empirically assess the economic impact of tourism promotion policies in Algeria. By utilizing an economic model based on the 2021 Social Accounting Matrix (SAM) multipliers, the study aims to quantify the direct, indirect, and induced effects of increased tourism demand on various sectors of the national economy. Specifically, the research seeks to evaluate how tourism expenditure influences production, sectoral output, and income distribution, while also identifying which sectors and economic agents benefit the most from tourism growth. Theoretical Framework: Study is based on the Social Accounting Matrix (SAM) approach, which examines the interconnections between sectors of the economy and tracks the flow of income and expenditure. It incorporates input-output theory to measure the direct, indirect, and induced effects of increased tourism demand. The concept of economic multipliers is central, highlighting how tourism spending influences various sectors. Additionally, the framework assesses the distribution of benefits across different economic agents, focusing on how tourism impacts production, sectoral output, and income distribution in Algeria. Method: This study uses 2021 Social Accounting Matrix (SAM) data to analyze tourism demand in Algeria. It develops an economic model, simulates scenarios, and assesses the economic gains and distribution of benefits, providing a comprehensive evaluation. Results and Discussion: The SAM-based economic model shows that Algeria's tourism demand boosts production and output across sectors, particularly agriculture, hospitality, agri-food, construction, transportation, and energy. However, the benefits are not evenly distributed, potentially leading to income inequality. Policy interventions should focus on equitable income distribution and supporting key industries. Research Implications: Tourism can drive Algeria's economic diversification, reducing dependence on traditional sectors. Inclusive tourism policies are needed to ensure equitable benefits for wage earners and lower-income groups. Future research should focus on sector investment and employment effects. Originality/Value: This study analyzes the economic impacts of tourism promotion policies in Algeria, focusing on the 2021 Social Accounting Matrix. It provides insights into the distribution of benefits and emphasizes the need for inclusive policies. The findings provide actionable insights for policy development.

Structural Changes in Haryana Agriculture

The present investigation was carried out for Haryana state for the period 1970-2021. Economic growth has been defined as a structural transformation process in which the contribution of industry and services sectors increased and agriculture's relative proportion of national production decreased. Statistical averages, percentages and CAGRs, were computed. Sectoral labor shares, capital formation, and sectoral output composition are the chosen metrics to evaluate structural change in the state. Agricultural performance was evaluated using key indicators of development, such as crop yields, cropping intensity, irrigation intensity, tractor density, and fertilizer consumption. Although Haryana is primarily an agricultural state, it has also seen significant growth in the industrial and service sectors. The main conclusions indicate that Haryana's structural changes align with those of India's national economy. However, the agricultural sector requires greater focus from policymakers to encourage the adoption of new farming innovations.

Exploring the impact of economic growth and sources of electricity production in India: New insights from sectoral analysis using NARDL approach

This study aims to explore the asymmetric impact of renewable energy on the sectoral output of the Indian economy by analyzing the time series data from 1971 to 2019. The nonlinear autoregressive distributed lag approach (NARDL) is employed to examine the short- and long-run relationships between the variables. Most studies focus on economic growth, ignoring sectoral dynamics. The result shows that the sectoral output shows a differential dynamism with respect to the type of energy source. For instance, agricultural output responds positively to the positive shock in renewable energy, whereas industry and service output behave otherwise. Since the latter sectors depend heavily on non-renewable energy sources, they behave positively towards them. Especially, electricity produced from non-renewable energy sources significantly influences service sector output. However, growing evidence across the world is portraying the strong relationship between the growth of renewable energy sources and economic growth. However sectoral dynamism is crucial to frame specific policies. In this regard, the present paper’s result indicates that policies related to promoting renewable energy sources will significantly influence sectoral output in the long run in India.

Industrial Sector Performance and Labour Force Participation in Nigeria: A Gender Perspective

The literature on the role of industrialization in labour force participation in Nigeria is quite scanty. Besides, there is significant disparity between male and female labour force participation rates in the country. To this end, this study investigated the impact of industrial sector performance on labour force participation in Nigeria. The total industrial sector output was disaggregated into the outputs of the various components of the Nigerian industrial sector namely; manufacturing, mining and quarrying, utility and construction sectors. Total labour force participation rate was equally disaggregated into male and female labour force participation rates. Annual time-series data for the period 1981 to 2022 were used for the study. The Augmented Dickey-Fuller (ADF) unit root test, Johansen cointegration test, error correction model (ECM), and Granger causality test were the econometric techniques used in analysing the data. The findings from the study revealed that manufacturing sector, and mining and quarrying sector outputs have significant positive impact on male labour force participation rate; construction sector output has insignificant positive impact on male labour force participation rate while utility sector output has insignificant negative impact on male labour force participation rate. On the other hand, manufacturing sector, and mining and quarrying sector outputs have significant negative impact on female labour participation rate while utility and construction sectors’ outputs have insignificant positive impact on female labour force participation rate. The main conclusion from the study is that while the total industrial sector performance largely encourages male labour force participation, it largely discourages female labour force participation in Nigeria

The impact of macroeconomic policy and supply shocks on sectoral output and the implications for policy

The impact of macroeconomic policy and supply shocks on sectoral output and the implications for policy

Carbon emission drivers of China's power sector and its transformation for global decarbonization contribution

To explore the contribution of China's power sector transformation to global CO2 emission reduction and the potential for this sector to achieve peak carbon, we used a hybrid input–output model to explore the direct CO2 emissions of six power sectors classified by generation methods and their impact on CO2 emission by the non-power sector based on the total power sector output (electricity generation). We then used structural decomposition analysis to explore the drivers. From 2012 to 2021, the total indirect CO2 emissions of China's power sector grew from 138.59 Mt to 158.79 Mt (the share in the carbon footprint increased from 3.7% to 3.9%), an increase of 14.6%. Over the period from 2012 to 2021, the power structure effect consistently reduced direct and indirect CO2 emissions. Policy scenario simulations showed that 12 scenarios for 2035 are expected to achieve peak carbon in China's power sector. The transition of China's power sector to cleaner energy will contribute greatly to global CO2 reduction in all sectors. In scenarios APS-DER-LD and APS-DER-HD, where the power structure effect was strongest, China and other countries will simultaneously experience large decreases in carbon emission, with decreases of 43.5 and 36.6%, respectively.

Can technological progress abate the negative impact of low carbon policies on economic growth in China?

ABSTRACT Whether technological progress can provide a complementary solution that reduces the economic costs of carbon pricing policies, thereby accomplishing a win-win situation for carbon abatement and economic growth? By developing an improved multi-regional dynamic CGE model that integrates investment adjustment costs into the capital accumulation equation, this study provides a lens through which to evaluate the collective impacts of the national carbon market, carbon tax, and technology progress in China. The findings confirm the substantial potential of carbon pricing policies to curtail CO 2 emissions, highlighting their critical role in climate change mitigation. Yet, it also exposes a trade-off, where these policies might impact GDP growth and exports, necessitating a balanced approach to policy design. The outputs of energy sectors are particularly vulnerable to carbon pricing policies, indicating a need for tailored strategies to support these industries in their transition towards sustainability. The study uncovers that the fusion of carbon pricing policies with technological progress can enhance carbon abatement efforts while softening the economic blow, illuminating a path to sustainable development that balances environmental and economic imperatives.

The Effect of Oil Price in Malaysia Economy Sectors

The objective of this study is to examine long-run relationship between oil price and Malaysia’s economy sectors, which include of agriculture, manufacturing and services sectors. Time series data for the period from 1980 to 2014 is applied such as Unit Root test, Johansen Cointegration test and Granger Causality test. Augmented Dickey-Fuller and Phillip-Perron tests results indicated that the variable proved to be integrated in order one I(1) at first difference. After testing Cointegration test, a long-run relationship between the variables was found and oil price does granger cause sectoral output in shortrun. Hence, this study is important for policy makers to restructure economic policies on oil price in Malaysia economy sectors.

The COVID-19 Pandemic and Sectoral Output in Sub-Saharan Africa: The Role of Information and Communications Technology

The COVID-19 Pandemic and Sectoral Output in Sub-Saharan Africa: The Role of Information and Communications Technology

The impact of agricultural value chains on sustainable industrial development in Sub-Saharan Africa

This research identifies the critical challenges surrounding agricultural value chains and their role in fostering sustainable industrial development in Sub-Saharan Africa (SSA) between 1990 and 2022, utilizing the Panel Least Squares (PLS) technique. The paper reports that agricultural value added (p < 0.01), farm machinery (p < 0.05), human capital (p < 0.01), and access to electricity (p < 0.01) exhibited a positive and significant influence on industrial sector output. Conversely, agricultural raw materials exports (p < 0.01) had a negative and significant impact on industrial sector output (p < 0.01). In conclusion, the study underscores the critical role of agricultural value chains in fueling sustainable industrial development in SSA and recommends that policymakers formulate plans to leverage agricultural value chains as catalysts for enduring economic growth and development.

Digital economy's role in shaping carbon emissions in the construction field: Insights from Chinese cities

Achieving net-zero greenhouse gas emissions in the construction sector is essential to sustainable development policy. Previous studies have ignored the impact of the digital economy on carbon emissions in the construction industry. Using relevant city-level data from China from 2011 to 2021 and employing ArcGIS and Stata software, this study examines the current status of carbon emissions from the construction industry and investigates the impact of the digital economy on these emissions. The findings reveal that (1) from 2011 to 2021, carbon emissions of the construction industry have a pattern of decreasing-increasing-decreasing-increasing across the country. There is an increasing concentration of areas with high and relatively high carbon discharges in Heilongjiang, Jilin, Ningxia, Inner Mongolia, Shanxi, Guangxi, and Guizhou. (2) The standard deviation ellipse indicates the core area of carbon emissions in China's construction industry is moving northeast and becoming more decentralized. (3) Through a series of robustness tests, the digital economy has been proven to effectively reduce carbon emissions from the construction sector in municipal areas. (4) In severely cold regions, mild regions, and high-population-density cities, the digital economy reduces building sector's carbon output. However, it stimulates carbon emissions in the hot summer and cold winter regions. (5) Mechanism tests show that the digital economy reduces China's urban construction carbon emissions by fostering technological progress and green innovation. Urban resilience further strengthens the contribution of the digital economy to reducing carbon discharges in the urban construction sector of China. This article presents empirical evidence demonstrating how the digital economy empowers the construction industry to curtail emissions.

IMPACT OF COMMERCIAL BANK’S CREDIT ON MANUFACTURING SECTOR OUTPUT IN NIGERIA

<p>This study examines the impact of commercial banks' credit (CBC) on manufacturing sector output (MSO) in Nigeria from 1992 to 2021 using Ex-Post Factor Research Design Approach. The study’s findings indicate that commercial banks credit (CBC) has a beneficial and substantial impact on manufacturing sector output (MSO). The long-term value of CBC has a positive and substantial impact on MSO. A 1% rise in Credit to Small and Medium Businesses (CSM) led to a 0.1866% increase in MSO. Conversely, a unit increase in deposit interest rate (DINR) resulted in a 0.0081% fall in MSO. In the long run, a unit increase in Government Capital Expenditure (GOV) caused a 0.1482% increase in MSO. Therefore, the study recommends that using its monetary policies, federal government can make an efficient policy that allows the manufacturing sector and small and medium enterprises to access bank credit at low interest rates.</p>

General equilibrium analysis of carbon tax policy on water-energy-food nexus efficiency

Carbon-reduction policy affects socio-economy and Water-Energy-Food (WEF) nexus contained therein. Existing studies concentrated on policy performances on resource consumption, but cannot quantify the impacts on resource utilization efficiency. To fulfill such gap, this study developed an integrated evaluation method through integrating computable general equilibrium model with data envelopment analysis to explore the impact of carbon tax on WEF environmental efficiency of China. Results show that increasing carbon taxes would improve the energy structure and reduce carbon emissions. While the increased cost of fossil fuels would have negative but limited impacts on economic output of water supply and food sectors through economic activity connections. Synergistic effect of WEF resource conservation could be observed in most production sectors, expect for clean energy sectors. Carbon tax would improve the WEF environmental efficiency expressed as the trade-offs between economic and carbon emission outputs and WEF resource inputs. There are significant differences in WEF efficiency and its growth rate among production sectors, with food sectors experiencing the most significant improvement in WEF efficiency at a carbon tax of 70 yuan/ton. The evaluation results raised the awareness of the performance of carbon tax on WEF nexus and provide a new perspective for promoting WEF nexus efficiency.

Being Green and Prudent: Economy-Wide and Environmental Impacts of Renewable Energy Production Subsidy in Nigeria

ABSTRACT: Green fiscal policies are becoming prominent policy instruments for achieving energy transition. However, while the effectiveness of these policies on renewable energy outcomes have been well documented, the economy-wide impacts are rarely studied. This study examines the economy-wide and environmental impacts of renewable energy production subsidy in Nigeria. The study provides a novel modeling framework for analysing fiscal and other incentives for green energy in Nigeria by incorporating self-generated electricity, which is a major component of electricity supply in Nigeria, into a macroeconomic model. The study uses a Computable General Equilibrium (CGE) model to analyse the effectiveness and economic impacts of renewable energy production subsidy in Nigeria. CGE models are commonly used to assess the economy-wide impacts of public policy. Specifically, the PEP-1-1 model, which is a static single-country model, is used for the analysis. The model is calibrated on Nigeria's updated social accounting matrix (SAM). The results of the analysis show that renewable energy production subsidy is effective in enhancing the development of the renewable-electricity sector and encouraging the use of renewable electricity but does not significantly reduce the use of conventional electricity sources. The subsidy, if financed by public deficit, has positive impacts on real economic outcomes such as GDP, household income, welfare, and employment, but has a smaller effect on CO2 emissions. In contrast, the economic effects are mostly negative, but the CO2 emissions-reduction effects are larger if the subsidy is financed by reallocation of public expenditure. In addition, the effects on sectoral outputs are mixed. The results of this study can be used by policy makers to ascertain how to finance green subsidies in fiscally constrained and energy-poor developing countries. Specifically, policy makers should take cognizance of economic and feedback effects when designing and implementing environmental policies. Beyond Nigeria and the specific case of fiscal subsidies, the modeling framework presented in this study can be applied to other green energy policies and can be adapted to other developing countries.

Economic impacts of climate change on forests: a PICUS–LANDIS–CGE modeling approach

Climate change is expected to alter both forest stand- and landscape-level dynamics through a change in environmental characteristics. While numerous studies have employed models to assess the ecological and/or economic impacts of such changes on forests throughout the world, there is need to further refine such analyses. In this paper, we contribute to this literature by coupling an ecological (PICUS–LANDIS II) modeling framework with an economic (computable general equilibrium) model to better account for the economic impact associated with climate-induced impacts on forest stand- and landscape-level structure and composition dynamics. Applying this framework to a case-study region of New Brunswick, Canada, we estimate that climate change will reduce softwood supply by 16%–73% and impact hardwood supply in the range of −2% to +4% by 2150. The change in wood supply is estimated to reduce the value of the softwood and hardwood forestry and logging sector output by up to 51% and 17%, respectively, by 2150. These sector-level impacts may lead to a 0.08%–0.88% reduction in annual gross domestic product by 2150. The methodological advances established in this study can be used to better inform future forest management and economic plans that aim to lessen both the ecological and economic impact of climate change.

Agricultural Sector Output and Economic Growth Sustainability in Nigeria

This study examined the impact of agricultural sector output on economic growth and sustainability in Nigeria. The data for the study were extracted from the Central Bank of Nigeria (CBN) Statistical Bulletin. The methodology adopted in the research is linear regression with the application of the Ordinary Least Squares (OLS) Technique. The E-views 10 was the econometric software used for the research. The major findings of the study reveal that agricultural output contributes negatively and insignificantly to economic growth, government agricultural expenditures contribute negatively and insignificantly to economic growth, rainfall contributes negatively and insignificantly to economic growth and foreign direct investment in the agricultural sector contributes negatively and insignificantly to economic growth. It is therefore the recommendation of this paper that the government of Nigeria should encourage farmers by giving soft loans for agricultural activities. This will help farmers meet with financial needs in terms of purchasing some seeds, hiring machines, etc. thereby boosting massive agricultural production in Nigeria.

Economic Implications of the Nationally Determined Contribution (NDC) of Vietnam: A CGE Analysis with Capital-Energy Substitution Elasticities Estimated Using Firm-level Data

Purpose - The purpose of this paper is to assess the economic implications of Vietnamese Nationally Determined Contribution (NDC) targets towards emission reduction. Design/Methodology/Approach - We devised four scenarios corresponding to economy-wide emission reduction targets and sector targets specified in the most up to date NDC of Vietnam and the NDC technical report. The scenarios were then simulated in a CGE framework to reveal how important economic indicators and welfare change relative to baseline scenarios in 2030. The capital-energy substitution elasticities of 24 Vietnamese sectors were also estimated using a nested CES production function and used for model calibration. Findings - The results indicate that the coal mining sector undergoes a significant decline in output in response to the imposition of emission reduction schemes. Outputs of sectors with high capital-energy substitution elasticities such as non-metallic mineral, metal, and agriculture are more resilient to mild restriction policies compared with sectors with low elasticities. Imposing a moderate economy-wide restriction might lead to slight improvements in GDP and welfare. Under aggressive emission policies, the CGE model predicts major trade shifts in key export sectors, including electronics, electrical equipment, and machinery, and losses in allocative efficiency due to reduced input tax revenue. Research Implications - We recommend excluding the coal mining sector from NDC, providing short-term tax cuts or cost subsidies for exporting industries under aggressive sector-specific emission policies, and imposing a carbon tax on sectors insensitive to emission restrictions to offset the loss in tax revenue.