An Empirical Analysis of the Impact of Non-Tariff Trade Restrictions on Manufacturing Jobs in Nigeria

Abstract Research purpose. The research sought to investigate the impact of non-tariff trade restrictions on manufacturing jobs in Nigeria. Design / Methodology / Approach. In accomplishing this, the study adopts an econometric approach and employs the Auto Regressive Distributed Lag (ARDL) estimation technique to capture both short-run dynamics and long-run relationships between employment (EMP) and explanatory variables. Findings. The findings show that non-tariff trade restrictions significantly contribute to short-term and long-run job creation within the Nigerian industrial sector. However, import restrictions excluding taxes and tariffs do not exhibit significant short-term effects, suggesting that the type of trade restrictions implemented matters for immediate employment outcomes. The negative relationship between real wages and industrial employment across both short and long runs indicates that rising labour costs can deter firms from expanding their workforce, pointing to the critical role of managing wage levels for job sustainability in the industrial sector. Originality / Value / Practical implications. The extent to which non-tariff measures affect trade, manufacturing employment and wages is less well understood and documented in Nigeria; hence, this study examines the impact of non-tariff trade restrictions on manufacturing jobs in Nigeria. Unlike most previous studies that used factor content or growth accounting approaches and the gravity model in explaining the effects of trade on employment, this study employs an econometric modelling approach to labour demand and uses measures of aggregate trade restrictions as a proxy for measuring non-tariff trade restrictions in Nigeria. Thus, while trade restrictions can be used to protect domestic industries and industrial employment, nevertheless, manufacturing job sustainability can only be guaranteed if complementary policies that would improve the quality of manufactured products, increase domestic demand and value addition in industries are implemented.