IMPACT OF TRADE LIBERALIZATION ON BUSINESS PERFORMANCE OF CHOSEN MULTINATIONAL CORPORATIONS: A CASE STUDY OF MTN
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ABSTRACT
This empirical study examined the influence of trade liberalization on the business performance of selected multinational corporations, using MTN as a case study. This study’s objectives were to assess the impact of trade liberalization policy reforms in Nigeria on the revenue, employment levels, and wage structure of multinational corporations, to assess the impact of trade liberalization policy in Nigeria on how issues related to economic empowerment and foreign ownership have been addressed, and to assess the impact of trade liberalization in Nigeria on the import and export initiatives of multinational corporations. The Heckscher-Ohlin Theory of Factor Endowment was utilized as a theoretical framework. The topic of the study includes MTN’s utilization of senior and junior staff. Utilizing a survey research design, the population for this study consisted of all MTN employees. The sample consisted of 96 workers, and cluster sampling was utilized. The questionnaire was utilized as a data gathering instrument. The information was gathered from primary sources. The findings of the data analysis indicate that trade liberalization policy reforms in Nigeria have a significant impact on the turnover, employment levels, and wage structure of multinational corporations; trade liberalization policy reforms in Nigeria have a significant impact on the manner in which issues related to economic empowerment and foreign ownership have been addressed; and trade liberalization policy in Nigeria has a significant impact on the import and export initatives. As a result of the findings, it was suggested that trade liberalization policies be implemented to benefit Multinational Corporations in the country, that existing trade policies be reviewed and new ones be enacted to improve the business performance of Multinational Corporations, and that empowerment initiatives be implemented to assist Multinational Corporations. The conclusion of the study is that trade liberalization has a beneficial effect on the financial performance of multinational corporations.
Trade liberalization, Multinational Corporations, Business performance, MTN are key terms.
FIRST PART
INTRODUCTION
Introduction to the study
One of the objectives of trade policy that have attracted the attention of policymakers in Nigeria over the past several decades has been the maintenance of economic stability that supports the growth of the real sector of her economy, thereby achieving an outward-oriented trade regime, greater global integration, competitiveness, and export-led growth. This was in reaction to the issues of the Nigerian economy remaining subject to changes in oil prices in the post-civil war era and the crisis of the world oil market in the early 1980s, both of which had a negative impact on the Nigerian economy. In Nigeria, political and institutional unpredictability persists, and the erosion of the rule of law has deterred foreign direct investment and trade flows outside of the oil export industry. This incident is due to the inefficiency and incorrect policies, among other factors.
Different policy frameworks, the most of which include trade policy, have been implemented by successive administrations in Nigeria between 1980 and 2019 to address these issues. For instance, the Economic Stabilization Act and the Structural Adjustment Programme (SAP) were enacted in 1982 and 1985, respectively, to create the groundwork for non-inflationary and sustainable growth. In addition, there were National Rolling Plans from 1992 to 1996, the National Economic Empowerment and Development Strategy (NEEDS I) from 2004 to 2007, and the National Economic Empowerment and Development Strategy (NEEDS II) from 2007 to 2011. These policy changes were intended to revitalize Nigeria’s actual economy.
Trade liberalization tries to alter a nation’s international policies in order to increase economic well-being through a more efficient allocation of resources over time. Successful trade liberalization is dependent on macroeconomic policy, which focuses on the short-term management of the economy as a whole.
Analyzing a company’s performance relative to its objectives and goals is organizational performance. Typically, a multinational corporation (MNC) is a major corporation incorporated in a single jurisdiction that produces or sells goods or services in multiple nations. However, the ability of multinational corporations (MNCs) to fulfill their intended goals is primarily contingent on the efficacy of the trade policies of the countries in which they operate.
Since 1986, Nigeria has undergone numerous structural changes on external equilibrium, exchange rate, trade liberalization, and trade policy reforms. Over the years, Nigeria has opened her borders to increased imports and exports of commodities and services. Recent implementation of the Economic Recovery and Growth Plan (ERGP) as a medium-term (2017-2020) plan to revive Nigeria’s economic growth was prepared by the government of the president (Muhammadu Buhari). A review of Nigeria’s trade policy from the 1960s, however, reveals a tendency that has been associated with unsettled and unpredictable trading regimes. Since the 1960s, trade policy has seen drastic policy shifts, from high levels of protectionism in the first decades after independence to its current liberal position (Adenikinju, 2005).
Description of the problem
Despite the varied trade policy regimes, Nigeria’s economic growth remained threatened by macroeconomic difficulties such as inflation, exchange rate instability, and out-of-balance external balances. Okoroafor (2010) attributed the inability of monetary policy measures to solve macroeconomic difficulties to a policy gap. However, Ogbaji and Ebebe (2012) also linked the failure to the Nigerian trade policies’ (1984-2011) incapacity to significantly contribute to the economic development.
Given the high level of trade (imports and exports) in Nigeria over the years and the sluggish growth recorded in the five decades of her political history (average Nigerian growth rate of 4.3% between 1980 and 2015), it is necessary to examine the effect of trade liberalization on business performance.
The aims of the study
This study’s objective was to assess the effect of trade liberalization on the business performance of chosen multinational corporations, using Samsung Mobile and Blackberry as case studies. The particular goals are as follows:
Evaluate the effect of trade liberalization policy revisions in Nigeria on the revenue, employment levels, and salary structure of multinational corporations.
Evaluate the impact of trade liberalization policy revisions on how concerns pertaining to economic empowerment and foreign ownership have been addressed.
Evaluate the impact of trade liberalization policy reforms on Multinational Corporation’s import and export initiatives.
1.4. Research Concerns
The following research questions will serve as the basis for this study:
What effect have Nigeria’s trade liberalization policy measures had on the turnover, employment levels, and wage structure of multinational corporations?
What effect have trade liberalization policy revisions had on how concerns connected to economic empowerment and foreign ownership have been addressed?
What effect do trade liberalization policy reforms have on Multinational Corporation’s import and export initiatives?
Theoretical Hypothesis
The following null hypotheses were developed to facilitate the study’s objectives.
Reforms to Nigeria’s trade liberalization policies have no effect on the turnover, employment levels, and salary structure of multinational corporations.
1.6 Importance of the Research
Efficiency and effectiveness are the primary factors of corporate performance, which cannot be attained without acknowledging the effects of trade liberalization on business success. This research is vital for determining the significance and influence of trade liberalization on corporate performance.
This study will be of the utmost importance to investors, the government, and researchers since it will provide policy suggestions to the different Nigerian stakeholders who are responsible for implementing the necessary economic measures for rapid growth and industrialization. It will contribute to the existing research on the subject by empirically examining the impact of trade liberalization on economic growth and national development. This research will be useful to;
Academia: Academia members will find the study relevant because it will serve as a basis for future research and a reference tool for academic publications.
Government: this study will inform the government of global market developments. Growth would be ensured by the formulation and execution of policies based on these findings.
This study will also be useful for investors, particularly those with a research interest, as it will inform their private investment decisions.
The Range of the Study
The scope of the study was limited to MTN for measuring the effect of trade liberalization on the business performance of chosen multinational corporations.
1.7. Definition of Terms for Operations
The following terms have been operationally defined.
The process by which the government removes limitations on certain private activities.
Trade liberalization is the elimination or reduction of restrictions or barriers to the free trade of products across states.
Multinational Corporations: a multinational corporation incorporated in a single nation that produces or sells goods and services in multiple nations.
1.9 Design of the Research
The study is organized into five chapters: chapter one contains the introduction, study background, problem statement, study objective, research questions, research hypothesis, significance of the study, scope, and limitations. The second chapter provides a literature review, an empirical analysis, and a theoretical framework. The third chapter discusses the study area and methodology, including an introduction, research design, study population, sample size and sampling strategy, sources of data collecting, data collection instrument, validity and reliability of instrument, and method of data analysis. The fourth chapter addresses the presentation of data, analyses, and discussion of findings, whilst the fifth chapter includes a summary, recommendations, conclusion, limits, and suggestions for further research on the topic.
IMPACT OF TRADE LIBERALIZATION ON BUSINESS PERFORMANCE OF CHOSEN MULTINATIONAL CORPORATIONS: A CASE STUDY OF MTN
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