The Impact of Equity Capital on Manufacturing Sector Output in Nigeria

Despite the inflow of Equity capital to boost manufacturing sector output in Nigeria, the contribution of manufacturing sector output to gross domestic product has been low. It is against this backdrop that the study investigated the effect of FDI on manufacturing sector output in Nigeria. The study adopted the ARDL model on annual time series data from 1986 to 2022 analyse the relationship between equity capital and manufacturing sector output. The ADF unit root result revealed that Interest rate (INR) and Equity Capital (EC1) are stationary at level while Manufacturing Sector output (MO), Reinvested Earning (RE) and Intra-Company Loans (ICL) became stationary at first difference. The result of the ARDL bound test showed that there is a long run relationship between Equity capital (EC) inflow (RE, INR and EC1) and manufacturing sector output in Nigeria. The findings of the study further revealed that Equity capital inflow (RE, INR and EC1) have significant effect on manufacturing sector output in Nigeria, this is judging by the probability value of less than 0.05% level of significance. Therefore, the study recommended that to promote access to equity capital, there is need for government at all level to encourage the development of Nigeria's capital market by providing manufacturing firms with access to equity capital, implement policies to attract foreign portfolio investors and encourage domestic investors to invest in the manufacturing sector.