Determinants of Growth in Manufacturing Industries: Empirical Evidence from Egypt Using the ARDL Approach

Mohamed A.M. Sallam
International Journal of Economics and Business Administration, Volume IX, Issue 3, 137-153, 2021
DOI: 10.35808/ijeba/724


Purpose: This study investigates essential determinants affecting the Egyptian manufacturing sector from 1970 to 2019. Design/Methodology/Approach: The study employs annual time-series data spanning the 1970-2019 period from the databases of the World Bank. Autoregressive distributed lag approaches are employed to examine the short- and long-run relationship causality among variables. Findings: The empirical results reveal a positive and statistically significant relationship between industry value-added and gross fixed capital formation, number of workers, and foreign direct investment, respectively, while the relationship of industry value-added with the gross domestic product and total factor productivity is added being negative and statistically significant. This result is explained by other sectors that contribute more to growth in the domestic product, such as the tourism sector and the Suez Canal. Practical Implications: These findings provide a better understanding of the determinants affecting the Egyptian manufacturing sector Originality/Value: The study would help policymakers to explore the most productive Egyptian manufacturing industries and adopt economic policies that stimulate investment in the manufacturing sector to increase economic growth and exports.

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