DETERMINING THE IMPACT OF HINTERLAND DISTANCE ON SHIPPERS' BUSINESS PERFORMANCE IN LAGOS AND OGUN STATE, NIGERIA

Abstract

Abstract: The more we understand the sphere of influence of a port, the better the decision on business location; especially in the hinterland. This study therefore, examines the impact of hinterland distance relative to seaport on shippers' business performance in Lagos and Ogun states, Nigeria. Data were collected through questionnaire survey of 23 publicly quoted manufacturing companies whose containers are regularly shipped through Lagos Seaports. The 23 companies were purposively selected from import-dependent manufacturing sub-sectors namely; Consumer Goods, Industrial Goods, and Health Business. Panel Vector Error Correction Model estimations were conducted on a panel data that span for 10years duration. Study results show that there is an overall significant relationship between hinterland distance relative to Lagos seaports and shippers' business performance. In the short run, it was found that hinterland distance relative to Lagos seaports has positive and significant impact on turnover, and cost of sales. On the long run relationship, hinterland distance relative to Lagos seaports are likely to negatively and significantly impact on business performance of the sampled firms. The study demonstrates that hinterland distance works as an indicator to determine the sphere of influence of a seaport on its hinterland.