Technology-related Factors as Determinants of Export Potential of Nigerian Manufacturing Firms

Though economic growth has improved in recent years in Nigeria, there has been no evidence of significant manufacturing exports. A critical input that enables capacity for export is investment in technology especially at the firm-level. This study investigates investment in technology by firms in Southwest Nigeria and how technology investment related factors affect the export potential of firms. Data was obtained from a survey of Nigerian firms in 2008. Results demonstrate that investments in technology are dominated by imported technologies, investment in ICTs are becoming widespread though not deep in manufacturing related functions, and technology investments are not directly targeted at improving the export potential of firms. The results also showed that firm size has a strong positive relationship with export potential, and it is the most important factor that affects the export potential of firms. The coefficient of firm size is the only parameter estimate that is consistently statistically significant at 1% level for all four export models estimated. Other technology investment related factors that impact positively on export potential include skills intensity, investment in skills upgrading, cost efficiency, and investment in quality management.