INNOVATION AND ECONOMIC STRUCTURAL CHANGES IN NIGERIA: A PATHWAY TOWARDS ATTAINING ECONOMIC GR
1Victor UshahembaIjirshar, 2JosephTarzaSopko,3HilaryEshidenangUshie&4Kelvins Terhemba ADZER
1,2Department of Economics, Benue State University, Makurdi
3University of Calabar Microfinance Bank
4College of Education, Katsina-Ala
ABSTRACT
The study examines the relationship between innovation and economic structural changesas a pathway towards attaining economic growth in Nigeria. The study covers 1986 to 2018. The study is based on the Auerbach-Kotlikoff (AK) model, product variety theory, and the Schumpeterian theory of growth. Vector Error Correction (VEC) Granger Causality test was used to examine the causal relationship between innovation and economic structural changes and the Vector Error Correction testwas used to examine the influence of innovation and economic structural changes on economic growth in Nigeria. The study found a unidirectional relationship running from domestic investment to innovation in Nigeria and no causal relationship between innovation and economic structural changes in Nigeria. Innovation andeconomic structural changesalso do not granger cause economic growth in Nigeria. The study further reveals that innovation, value addition in agriculture, value addition in manufacturing, value addition in industry, and value addition in the service sector have a strong influence on economic growth in Nigeria in the long-run. The study recommends that Nigerian government should channel government spending towards productive investments and improve research and development that could advance the level of technology and accelerate the economic structural changes in the country, create enabling business environment through development of infrastructural facilities for domestic investors to strive, establish investment incentives such as soft loans and implement trade policies that could favour the growth of the domestic infant industries and invest hugely in value addition activities in all the sectors that could change the economic structure of the Nigerian economy thereby creating a room for growth.
Keywords: Economic Growth, Innovation, Economic structural changes, and Value addition
