Global Journal of Human Social Science, E: Economics, Volume 22 Issue 2

LNDD -0.581113 0.218478 -2.659822 0.0143 LNTR 0.185099 0.095259 1.943114 0.0649 R-squared 0.990917 Mean dependent var 13.09155 Adjusted R-squared 0.987614 S.D. dependent var 2.541128 S.E. of regression 0.282803 Akaike info criterion 0.549571 Su *m squared resid 1.759510 Schwarz criterion 0.965889 Log likelihood 0.481657 Hannan-Quinn criter. 0.685280 F-statistic 300.0216 Durbin-Watson stat 1.733615 Prob(F-statistic) 0.000000 In the above model 2, long run analysis Capital Stock: The manufacturing sector performance responded negatively to capital stock (Ks). Theory has it that if investment per worker exceeds depreciation per worker, the change in capital per worker is positive: the capital intensity increases. But if investment per worker is less than the depreciation per worker, the change in capital per worker is negative: the capital intensity decreases. When capital and output are low, investment exceeds depreciation and capital increases. But when capital and output are high, investment is less than depreciation and capital decreases. To maximise consumption in Steady State the economy must save until the marginal product of capital f'(k) is equal to the effective depreciation rate ( δ ). At which point, any further increase in saving, and hence capital, will push the marginal product of capital below the effective depreciation rate. To maximize consumption for current and all future generations, the economy should re-invest all capital income and consume all labour income. In other words, we need to write down households' intertemporal utility maximization problem (the RamseyCass-Koopmans Growth Model 4.1.15). If households are impatient to consume then it is optimal to have a level of steady-state capital which is less than the golden rule. Finally, it is never optimal to have a level of capital above the golden rule. This is because the process of capital formation is cumulative and- self feeding and it includes three inter-related stages i. The existence of real savings and the rise in them ii. The existence of credit and financial institution to mobilize savings and to direct them in desired channels. iii. And to use savings for investment in capital goods. Thus the problem of capital formation becomes two-fold-how to increase the propensity to save of the people in lower income group; and how to utilize current savings for capital formation. The major problem is that the rate of capital formation via savings mobilization and investment that will encourage the growth of output of t industries is very low, output is low and so is national income as a result per-capita-income is low, hence the propensity to save is very low and this poses a great hindrance to the rate of capital formation in Nigeria. A one unit change in Ks holding other variable fixed will cause industrial performance to decline by 0.268. Even though it appears negative, the t-ratio is significant at 10% level, which means that in the long-run it will affect manufacturing performance positively. The apriori expectation is positive. Investment in capital has not only directly increase output, but also introduces positive externalities for related industrial labour force. The greater the capital stock and integration with international industries, the more investment will encourage savings, investment and economic growth has strong positive influence on manufacturing performance a high level of capital stock can strongly stimulate industrial production. Labour force (LF) has positive and significant relationship with Manufacturing Sector Performance (MP). The rate of change of the conditional means MP with respect to LF is about 6.294, meaning that it will bring an increase in MP by about 6.294 units. This is particularly true because most of the industries in Nigeria are labour intensive. It means that the industries should embark on labour intensive projects, since it has comparative advantage than capital intensive projects. Human capital (H) from theory is an important factor for the wealth of a nation due to its influence on the overall production of the country. Skilled labour is necessary to manage and develop them as well as to improve the quality and productivity of the existing labour. However, Nigeria is having problem with its human capital. The human development index provides a measure of human capital development (HDI) in three dimensions: income, health and education. The latest values of HDI shows Nigeria ranked 156 and with the value of 0.459 among 187 countries. The value places Nigeria in the bottom, meaning that Nigeria is considered to have low level of human development. Additionally, Nigeria is equally facing a relative high inequality, worsening the problem regarding the formation of human capital due to low value for education index of 0.457, compared to the average of 0.939 in the United State of America. Evidence shows that it has a negative relationship with manufacturing performance. The rate of change of the conditional mean MP with respect to H is about -0.600. It means that one unit change in H will bring about 0.600 decline in manufacturing performance. Human capital or in © 2022 Global Journals Volume XXII Issue II Version I 77 ( ) Global Journal of Human Social Science - Year 2022 E Impact of Trade Liberalization on the Nigerian Manufacturing Sector