Capacity Utilization in Manufacturing Industries: Evidence from Nigerian Firm Level Data

ABSTRACT: This thesis examines the determinants of Capacity Utilization among manufacturing firms in Nigeria. Using manufacturing firm level survey conducted by Enterprises Survey under the auspices of the World Bank, we attempted to identify these determinants within the framework of an economic model, using two separate cross-sectional data garnered from surveys in 2010 employing the robust Quantile Regression technique. Our analysis and findings provides evidence that the duration of power outages in Nigeria accounts for a large chunk of capacity under-utilization among manufacturing firms. The percentage of skilled production workers that a firm has also plays an important role in its utilization of capacity. Recommendations to improve and build upon the existing capacity among firms were made, this is inspired by the important functions that manufacturing industries play in any economy, which determines to a large extent, the flexibility of that economic system to meet future requirements for the objective of being productive, efficient and competitive. It is hoped that the policy suggestions therein would help make Nigerian industries better equipped to face challenges amidst global competition. Keywords: Capacity Utilization, Quantile Regression, Nigerian Manufacturing, Enterprises Survey. ……………………………………………………………………………………………………………………………………………………………………………………………………………………