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Technology Acquisition and Productivity among Nigerian Firms

Oluwadare, Adekemi J. and Obembe, Olufemi and Olayungbo, David O. (2016) Technology Acquisition and Productivity among Nigerian Firms. In: 3rd International Conference On African Development Issues (CU-ICADI), May 9- May 11 2016, Covenant University, Ota, Nigeria.

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This study examines the statistical relationship between technology acquisition and productivity in Nigerian firms. The role of technology in firm operations has been well explored in developed economies, but little evidence exists in the developing country context, especially in Nigeria. Technology acquisition, broadly described as a process in which firms obtain technology from both internal and external sources, is measured in this study as the sum of expenditure on R&D, royalty payments and technical/license fees. The Cobb-Douglas production function is modeled with acquired technology as an input into the production process. Output, capital and labour included in the productivity equation are measured by turnover, fixed assets and labour cost, respectively. Data was obtained from the published annual reports and accounts of selected manufacturing firms listed on the Nigerian Stock Exchange between 2001 and 2013. The firms are distributed across approximately eight sectors and the dominant ones are firms in the consumer goods, industrial goods and healthcare sectors. The data obtained was analysed using the Arellano and Bond Generalized Method of Moments (GMM) technique which is known to address problems of endogeneity. The GMM estimates obtained indicate a negative and insignificant relationship between technology acquisition and productivity in Nigerian firms. This was against the apriori expectation. This provides evidence that foreign-sourced technology negatively impacts on economic development in the country and might indicate that the technology acquisition/transfer processes in the country do not incorporate the development of internal absorptive capacity. Policy recommendations provided in this study include designing industrial policies in Nigeria to ensure effective technology acquisition/transfer processes and to develop and promote the use of indigenous technology in the private sector.

Item Type: Conference or Workshop Item (Paper)
Uncontrolled Keywords: Technology Acquisition; Productivity; Firms; Nigeria; GMM
Subjects: H Social Sciences > HB Economic Theory
Divisions: Faculty of Law, Arts and Social Sciences > School of Social Sciences
Depositing User: Mrs Hannah Akinwumi
Date Deposited: 27 Jun 2016 15:19
Last Modified: 27 Jun 2016 15:19

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