This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
Faculty of Social Sciences, Lagos State University , Ikeja , Nigeria
Faculty of Social Sciences, Lagos State University , Ikeja , Nigeria
This study investigates the dynamic relationship between energy efficiency, productivity, and factor substitution in Nigeria’s manufacturing sector from 1981 to 2023. Using a post-positivist framework and secondary time-series data, we employ Stochastic Frontier Analysis (SFA) to estimate energy efficiency, a Nonlinear Autoregressive Distributed Lag (NARDL) model to assess its asymmetric impact on manufacturing output, and a Translog cost function to compute Morishima Elasticities of Substitution (MES). Results indicate an average energy efficiency score of 82.2%, highlighting significant potential for improvement. The NARDL estimates reveal that energy efficiency asymmetrically affects manufacturing output, with negative shocks exerting a disproportionately larger long-run impact than positive improvements. Furthermore, capital and energy are substitutes (MES > 0), while capital and labor are complements (MES < 0), suggesting that energy price policies could reshape the sector’s input structure. The study concludes that energy efficiency is not merely an environmental or cost-saving concern but a strategic determinant of industrial productivity in Nigeria. Policy should therefore prioritize institutionalizing energy efficiency within the national industrial strategy, supported by incentives for technology adoption and skills development.
Energy Efficiency, Total Factor Productivity, Input Substitution, Nigerian Manufacturing, Stochastic Frontier Analysis, NARDL, Morishima Elasticity
The statements, opinions and data contained in the journal are solely those of the individual authors and contributors and not of the publisher and the editor(s). We stay neutral with regard to jurisdictional claims in published maps and institutional affiliations.
