Impact Of Globalization On The Industrial Growth
Globalization, a process marked by the increasing interconnectedness of economies, societies, and cultures across the globe, has significantly influenced industrial growth in various ways. As economies become more integrated through trade liberalization and technological advancements, industries have gained access to larger markets, leading to increased production and expansion opportunities. Moreover, globalization has facilitated the dissemination of knowledge and technology across borders, fostering innovation and efficiency improvements within industries. However, globalization also presents challenges such as intensified competition and the outsourcing of labor to lower-cost regions, which can impact industrial growth by exerting pressure on profit margins and employment levels in certain sectors. Nevertheless, through strategic adaptation and leveraging global opportunities, industries can capitalize on the benefits of globalization to drive sustainable growth and competitiveness in the international market landscape.
This study is meant to investigate the impact of globalization on the Industrial Growth of Nigeria covering the range of 31years (1980-2010). It is obvious that Nigeria as a country still depends on the importation of productive inputs despite all efforts to develop her local resources. Thus, the objective of this study is to determine the impact of globalization on the industrial growth of Nigeria. The study reveals that for Nigeria to benefit from globalization her productive capacity, economic structure, political stability, macroeconomic policy and technology should be enhanced. Since we found out that trade openness has a negative impact on industrial growth. Therefore, it should be handled with caution, policies should be directed to decrease trade openness, especially where Nigeria has a comparative advantage due to the fact that we have abundant labour, we should promote labour intensive method of production and export commodities to earn foreign currency for use in other sector. In that case, the government should take agriculture seriously and also encourage local producers by giving them incentives in the form of tax rebates.
Title page
Approval page
Dedication
Acknowledgement
Abstract
Table of Contents
CHAPTER ONE:
1.0 INTRODUCTION
1.1 Background of study
1.2 Statement of the Problem
1.3 Research question
1.4 Objectives of the Study
1.5 Statement of Hypothesis
1.6 Scope of the Study
CHAPTER TWO:
2.0 LITERATURE REVIEW
2.1 Theoretical literature Review
2.1.2 Globalization and its Conceptual Usages
2.1.3 Empirical Literature
2.1.4 Limitations of the Previous Study
2.1.5 Historical Perspective
2.1.6 Benefits of Globalization
2.1.7 Problems of Globalization
2.1.8 Effects of Globalization on the world Economy
2.1.9 Effects of globalization on Nigerian industry
2.1.10 Globalization and the Nigeria Economy
CHAPTER THREE:
3.0 METHODOLOGY
3.1 Research Methodology
3.2 Frame work of the Model
3.3 Model Specification
3.4 Method of Evaluating of Results
3.5 Data Required Sources
CHAPTER FOUR:
4.0 DATA PRESENTATION AND ANALYSIS
4.1 Regression Results
4.2 Evaluation of Regression Results
4.3 Economic criteria
CHAPTER FIVE:
5.0 SUMMARY, POLICY RECOMMENDATION AND CONCLUSION
5.1 Summary of Findings
5.2 Policy Recommendation
5.3 Conclusion
Bibliography
APPENDIX
1.1 BACKGROUND OF STUDY
Globalization has benefited the advanced countries at the expense of the less developed countries. To the Marxists, this is not surprising as they hold that globalization is a product of the capitalist. They argued that the capitalist system epitomizes exploitation, it involved class conflict and it is a system of unequal relation marked by an unequal exchange. It is a system where one group must benefit at the expense of the other. Thus globalization being of such a system is bound to be exploitative. Several scholars has traced the origins of globalization in modern times, others trace its history long before the European age of discovery to the new world. Some even trace the origins to the third millennium BCE. Since the beginning of the 20th century, the pace of globalization has intensified at a rapid rate, especially during the post cold war era. The term globalization has being in use since the mid-1980’s and since the mid 1990’s.However, the main originators of globalization can be traced to the classical economists that showed that trade can be beneficial to their nation. Globalization developed through the
Pre-capitalist era to the period of industrial revolution in England and evolved into what we are seeing today. The above quote underscores the government
especially in developing countries to know the manner they pursue domestic economic policies. They should gear all the effort towards restructuring their economy to global economic changes in such a way that they will benefit from globalization.
In 2000, the international monetary fund (IMF) identified four basic aspects of globalization: trade and transactions, capital and investment movements, migration and movement of people and the dissemination of knowledge. Further, environmental challenges such as climate change, cross-boundary water and air pollution and over fishing of the ocean are linked with globalization. Globalization processes affect and are affected by business and work organization, economics, socio-cultural resources and the natural environment. The most
Drastic evidence of globalization is the increase in trade and the movement of capital stocks, bonds, currencies and other investment from the period of 1950-2001. The volume of world’s export rose by 20 times and by 2001, world trade amounted to a quarter of all the goods and services produced in the world. In the early 1970’s only $10 billion to $20 billion in national currencies was exchange
daily, by the early part of the 21st century, more than $1.5 billion worth of yen, Euros, dollars, pounds and other currencies were traded daily to support the expanded levels of trade investment which is as a result of globalization.
1.2 STATEMENT OF THE PROBLEM
One could say that the crises in Nigeria’s tertiary institution arising from corruption, mismanagement as well as the devastating effect of the defunct structural adjustment. The present socio-economic and political condition of Nigeria on ground suggests that we will have a long way to go in the global competition of the 21st century. Also the Nigeria economy is made weaker by mono-cultural dependence and unfavorable terms of trade in its export trade as well as excruciating debt burdens. This problem can really make Nigeria not to benefit from the ongoing globalization process. The challenge is for Nigeria to use their enormous resources to build a strong, consistent self sustaining economy which will be competitive in the world market.
It is therefore, questionable whether Nigeria has been able to reap the benefit of globalization due to these weaknesses.
1.3 RESEARCH QUESTIONS
1) To what extent will globalization affect our economy and relation to other countries?
1.4 OBJECTIVE OF THE STUDY
1) To determine the impact of globalization on industrial growth
1.5 HYPOTHESIS OF THE STUDY
1) Globalization has no impact on the industrial growth of Nigeria
1.6 SCOPE OF THE STUDY
The study covers the growth of the Nigerian industrial sector and it has been attested by globalization from the period of 1980-2010.
Impact Of Globalization On The Industrial Growth:
Globalization has had a significant impact on industrial growth, transforming the way industries operate and develop. Here are some key ways in which globalization has influenced industrial growth:
- Market Expansion: Globalization has opened up new markets for industries. Companies can now access a global customer base, which has expanded their potential for growth. Access to larger markets often leads to increased production, economies of scale, and higher revenues.
- Access to Resources: Globalization has enabled industries to access resources from around the world. This includes not only raw materials but also skilled labor and technology. This access to resources has often led to increased efficiency and competitiveness.
- Technological Advancements: The rapid flow of information and technology across borders has led to significant technological advancements. Industries can adopt and adapt the latest technologies from anywhere in the world, which can improve productivity and create new opportunities for growth.
- Supply Chain Optimization: Globalization has allowed industries to optimize their supply chains. Companies can source components and parts from the most cost-effective locations, leading to cost savings and improved efficiency in production processes.
- Competition: Globalization has increased competition among industries. Companies now have to compete not only with local rivals but also with international firms. This competitive pressure can drive industries to innovate and improve their products and services.
- Specialization: Globalization has encouraged industries to specialize in what they do best. This has led to the development of global supply chains, where different countries and regions focus on producing specific components or goods. Specialization often results in increased efficiency and lower costs.
- Regulatory Changes: Globalization has influenced regulatory environments. Governments may change their policies to attract foreign investment or to remain competitive in the global marketplace. These regulatory changes can impact industrial growth both positively and negatively.
- Risk Management: Globalization has exposed industries to new risks, including currency fluctuations, geopolitical instability, and supply chain disruptions. To mitigate these risks, industries often develop more sophisticated risk management strategies, which can contribute to long-term growth.
- Environmental Impact: Globalization has also raised environmental concerns. The increased movement of goods and people has led to environmental challenges such as pollution and resource depletion. Industries are increasingly under pressure to adopt sustainable practices, which can impact their growth strategies.
- Cultural Exchange: Globalization has facilitated cultural exchange, which can influence consumer preferences and market demands. Industries may need to adapt their products and marketing strategies to cater to diverse global audiences.
In summary, globalization has had a profound impact on industrial growth by expanding markets, facilitating resource access, driving technological advancements, optimizing supply chains, and increasing competition. However, it has also introduced new challenges and risks that industries must navigate to sustain and enhance their growth in the globalized world.