The role of local content policy in local value creation in Nigeria's oil industry: a structural equation modeling (SEM) approach
The question of how adopting local content policy (LC policy) benefits the economic growth of developing oil-rich countries is hardly new but is a continuous debate that often centers on increasing the value-added that LC policy can create within the oil industry. However, the level to which LC poli...
| Main Authors: | , , , |
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| Format: | Article |
| Language: | English |
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Elsevier
2016
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| Online Access: | http://psasir.upm.edu.my/id/eprint/51583/ http://psasir.upm.edu.my/id/eprint/51583/1/The%20role%20of%20local%20content%20policy%20in%20local%20value%20creation%20in%20Nigeria%27s%20oil%20industry%20a%20structural%20equation%20modeling%20%28SEM%29%20approach.pdf |
| _version_ | 1848851872687849472 |
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| author | Niran, Adedeji Abdulkabir Ahmad Sidique, Shaufique Fahmi Abd Rahman, Azmawani Law, Siong Hook |
| author_facet | Niran, Adedeji Abdulkabir Ahmad Sidique, Shaufique Fahmi Abd Rahman, Azmawani Law, Siong Hook |
| author_sort | Niran, Adedeji Abdulkabir |
| building | UPM Institutional Repository |
| collection | Online Access |
| description | The question of how adopting local content policy (LC policy) benefits the economic growth of developing oil-rich countries is hardly new but is a continuous debate that often centers on increasing the value-added that LC policy can create within the oil industry. However, the level to which LC policy can achieve this goal in some of these countries has not yet been ascertained. In Nigeria, the impact of LC policy on local value creation has generated divergent speculation. This study addresses this gap by assessing the impact of LC policy in influencing local value creation with particular reference to indigenous oil firms’ participation, backward linkages and job creation. Structural equation modeling (SEM) technique was applied to analyze the data obtained from a survey of 209 local oil and gas firms in the Niger Delta. Our findings confirm that LC policy has a positive and significant impact on local value creation. However, we found that local value created in the Nigerian oil industry as a consequence of LC policy is lower than the expected target. This implies that the implementation of the policy needs to be closely monitored to ensure its efficacy towards increasing economic development. |
| first_indexed | 2025-11-15T10:29:05Z |
| format | Article |
| id | upm-51583 |
| institution | Universiti Putra Malaysia |
| institution_category | Local University |
| language | English |
| last_indexed | 2025-11-15T10:29:05Z |
| publishDate | 2016 |
| publisher | Elsevier |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | upm-515832017-04-05T04:07:59Z http://psasir.upm.edu.my/id/eprint/51583/ The role of local content policy in local value creation in Nigeria's oil industry: a structural equation modeling (SEM) approach Niran, Adedeji Abdulkabir Ahmad Sidique, Shaufique Fahmi Abd Rahman, Azmawani Law, Siong Hook The question of how adopting local content policy (LC policy) benefits the economic growth of developing oil-rich countries is hardly new but is a continuous debate that often centers on increasing the value-added that LC policy can create within the oil industry. However, the level to which LC policy can achieve this goal in some of these countries has not yet been ascertained. In Nigeria, the impact of LC policy on local value creation has generated divergent speculation. This study addresses this gap by assessing the impact of LC policy in influencing local value creation with particular reference to indigenous oil firms’ participation, backward linkages and job creation. Structural equation modeling (SEM) technique was applied to analyze the data obtained from a survey of 209 local oil and gas firms in the Niger Delta. Our findings confirm that LC policy has a positive and significant impact on local value creation. However, we found that local value created in the Nigerian oil industry as a consequence of LC policy is lower than the expected target. This implies that the implementation of the policy needs to be closely monitored to ensure its efficacy towards increasing economic development. Elsevier 2016 Article PeerReviewed application/pdf en http://psasir.upm.edu.my/id/eprint/51583/1/The%20role%20of%20local%20content%20policy%20in%20local%20value%20creation%20in%20Nigeria%27s%20oil%20industry%20a%20structural%20equation%20modeling%20%28SEM%29%20approach.pdf Niran, Adedeji Abdulkabir and Ahmad Sidique, Shaufique Fahmi and Abd Rahman, Azmawani and Law, Siong Hook (2016) The role of local content policy in local value creation in Nigeria's oil industry: a structural equation modeling (SEM) approach. Resources Policy, 49. pp. 61-73. ISSN 0301-4207; ESSN: 1873-7641 http://www.sciencedirect.com/science/article/pii/S0301420716300599 10.1016/j.resourpol.2016.04.006 |
| spellingShingle | Niran, Adedeji Abdulkabir Ahmad Sidique, Shaufique Fahmi Abd Rahman, Azmawani Law, Siong Hook The role of local content policy in local value creation in Nigeria's oil industry: a structural equation modeling (SEM) approach |
| title | The role of local content policy in local value creation in Nigeria's oil industry: a structural equation modeling (SEM) approach |
| title_full | The role of local content policy in local value creation in Nigeria's oil industry: a structural equation modeling (SEM) approach |
| title_fullStr | The role of local content policy in local value creation in Nigeria's oil industry: a structural equation modeling (SEM) approach |
| title_full_unstemmed | The role of local content policy in local value creation in Nigeria's oil industry: a structural equation modeling (SEM) approach |
| title_short | The role of local content policy in local value creation in Nigeria's oil industry: a structural equation modeling (SEM) approach |
| title_sort | role of local content policy in local value creation in nigeria's oil industry: a structural equation modeling (sem) approach |
| url | http://psasir.upm.edu.my/id/eprint/51583/ http://psasir.upm.edu.my/id/eprint/51583/ http://psasir.upm.edu.my/id/eprint/51583/ http://psasir.upm.edu.my/id/eprint/51583/1/The%20role%20of%20local%20content%20policy%20in%20local%20value%20creation%20in%20Nigeria%27s%20oil%20industry%20a%20structural%20equation%20modeling%20%28SEM%29%20approach.pdf |