http://www.iaeme.com/IJMET/index.asp 590 editor@iaeme.com International Journal of Mechanical Engineering and Technology (IJMET) Volume 10, Issue 05, May 2019, pp. 590-605, Article ID: IJMET_10_05_058 Available online at http://www.iaeme.com/ijmet/issues.asp?JType=IJMET&VType=10&IType=5 ISSN Print: 0976-6340 and ISSN Online: 0976-6359 © IAEME Publication INDUSTRIAL TECHNOLOGY AND MANUFACTURING PERFORMANCE IN NIGERIA: THE CASE OF SMALL-SCALE INDUSTRIALIZATION STRATEGY Lawrence Uchenna OKOYE Department of Banking and Finance, Covenant University Ota, Nigeria Felicia O. OLOKOYO Department of Banking and Finance, Covenant University Ota, Nigeria Felix N. EZEJI Department of Banking and Finance, Ebonyi State University, Abakaliki, Nigeria Alexander Ehimare OMANKHANLEN Department of Banking and Finance, Covenant University Ota, Nigeria. Uzoma B. ACHUGAMONU Department of Banking and Finance, Covenant University Ota, Nigeria. ABSTRACT Industrialization of the Nigerian economy started with the establishment of fully integrated large-scale industries for rapid development of the sector. However, inability of the strategy to fast-track economic growth in Nigeria led to a shift to small-scale industries. As opposed to the complex and sophisticated nature of the former, the latter strategy is characterized by simple technology which available industrial infrastructure could readily support. A blend of the right choice of technology and strong economic fundamentals is imperative for a vibrant and robust manufacturing sub-sector. This paper estimates the impact of key macroeconomic indicators on manufacturing performance in Nigeria using the method of vector auto- regression (VAR). The study focused on the industrial strategy based on small-scale industrialization. The variance decomposition result shows that variations in manufacturing capacity utilization in Nigeria are largely driven by shocks to its lagged values. The result further shows strong positive impact of trade openness on manufacturing capacity utilization. The study therefore concludes that manufacturing performance in Nigeria is partly driven by shocks to own innovations and partly by trade policy shocks. JEL Classification: E31, F31, G00, O24