Asian Research Journal of Current Science

This paper is an attempt to validate Kaldor’s law that stipulates that “manufacturing is the engine for growth”. Introducing the concept of globalization, the study is conducted within the Nigerian context for the period 1982 to 2020. The study used the unit root test as a diagnostic test; Johansen cointegration test to test for the existence of long-run relationship; and Dynamic Ordinary Least Squares (DOLS) technique to specifically study the influence of growth in manufacturing output on the growth of non-manufacturing output. The unit root test reflected that the variables were stationary at mixed order of levels, first difference, and second difference. The cointegration test so employed indicated the existence of five cointegratin equations in the model, supporting the existence of long-run relationship. Findings from the DOLS revealed that growth in the manufacturing sector exerts a positive and substantial influence on the growth of the non-manufacturing sector. From the coefficient, it was ascertained that a 1% increase in manufacturing sector output will on the average propels growth in the non-manufacturing sector by 0.3416%. Meanwhile, economic globalization was noted to exert a positive but inconsequential effect on non-manufacturing sector pointing out that within the study period, globalization does not really matter for the validity of Kaldor’s law in Nigeria. The study recommended that concerted efforts must be geared towards removing the hindrance to manufacturing growth which is a catalyst for growth in other sectors of the economy.