Technology Acquisition and Productivity among Nigerian Firms
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Abstract
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This study examines the statistical relationship
between technology acquisition and productivity in Nigerian
firms. The role of technology in firm operations has been well
explored in developed economies, but little evidence exists in the
developing country context, especially in Nigeria. Technology
acquisition, broadly described as a process in which firms obtain
technology from both internal and external sources, is measured
in this study as the sum of expenditure on R&D, royalty
payments and technical/license fees. The Cobb-Douglas
production function is modeled with acquired technology as an
input into the production process. Output, capital and labour
included in the productivity equation are measured by turnover,
fixed assets and labour cost, respectively. Data was obtained from
the published annual reports and accounts of selected
manufacturing firms listed on the Nigerian Stock Exchange
between 2001 and 2013. The firms are distributed across
approximately eight sectors and the dominant ones are firms in
the consumer goods, industrial goods and healthcare sectors. The
data obtained was analysed using the Arellano and Bond
Generalized Method of Moments (GMM) technique which is
known to address problems of endogeneity. The GMM estimates
obtained indicate a negative and insignificant relationship
between technology acquisition and productivity in Nigerian
firms. This was against the apriori expectation. This provides
evidence that foreign-sourced technology negatively impacts on
economic development in the country and might indicate that the
technology acquisition/transfer processes in the country do not
incorporate the development of internal absorptive capacity.
Policy recommendations provided in this study include designing
industrial policies in Nigeria to ensure effective technology
acquisition/transfer processes and to develop and promote the
use of indigenous technology in the private sector.
Keywords
HB Economic Theory