INVESTMENT CLIMATE AND RELATIVE TECHNICAL EFFICIENCY OF FOOD INDUSTRIES IN NIGERIA

This study examined the influence of investment climate on technical efficiencies of industries in Nigeria. The study was conducted in two phases namely (i) an estimation of the technical efficiency (TE) was carried out and, (ii) differences in TE across firms were statistically related to indicators of investment climate and firm-level characteristics. The analyses made use of 2009 World Bank Enterprise survey data on Nigeria. The results showed that food industry was more labour intensive and less efficient than other industries in Nigeria. The importance of scale, export and firm ownership was evident from the significance of the variables in all the industries. The results point to the fact that firms in Nigeria can improve their productivity by learning from customers and by facing international competition. Investment climate difficulties had less effect on food industries than others. The sector could be a good starting point in the nation’s industrialization policy drive if available resources can be utilized optimally.