Influence of firm related factors and industrial policy regime on technology based capacity utilization in sugar industry in Nigeria

Abstract

The study analyzed the technology based capacity utilization rate in sugar industry in Nigeria in the period 1970 to 2010. Data used in the study were obtained from the sugar firms, publications of the Central Bank of Nigeria and National Bureau of Statistics. Augmented Dicker Fuller unit root test was conducted on the specified data to ascertain their stationarity and order of integration. The result reveals that some variables were stationary at level while some were stationary at first difference. The diagnostic statistics from the multiple log linear regression on the specified variables confirmed the reliability of the model. The empirical result reveals that sugar cane price and sugar industry’s real energy consumption have significant negative relationship with the technology based capacity utilization in the sugar industry in Nigeria. On the other hand, the wage rate of skill workers, industry’s, real research expenditure, human capital and period of import substitution have significant positive influenced on the technology based capacity utilization rate in the industry. Our findings suggest that policy measures aim at expanding the hectares of industrial sugarcane and increase production of refined petroleum fuel in the country will promote capacity utilization in the industry. Also policies targeted on the intensification of research and improved worker’s remuneration in the sub-sector is strongly advocated.