Journal of Economics and Business

ISSN 2615-3726 (Online)

ISSN 2621-5667 (Print)

Published: 08 September 2018

Foreign Direct Investment and Economic Growth in Nigeria

Samson Bredino, Peter Fiderikumo

University of Port Harcourt, Bayelsa State Polytechnic, Nigeria

Download Full-Text Pdf

10.31014/aior.1992.01.03.25

Abstract

This study analyzes the relationship between foreign direct investment and economic growth in Nigeria. Secondary data on foreign direct investment, gross domestic product, and monetary policy rate were sourced from Central Bank of Nigeria. The model was analyzed using the Fully modified Least Squares, ADF Unit Root and the Johansen Cointegration test methods. The ADF test result revealed that the variables are not stationary at levels but stationary in first difference. There exists long-run relationship among the variables as shown from the Johansen Cointegration test result thereby forming the basis for employing the FMOLs. The Outcome of the Cointegrating test result shows that all the coefficients of the explanatory variable (FDI and MPR) are positive. However, only FDI was found to be significant. Based on the result of the research, the following recommendations were made among others: a combination of monetary, fiscal as well as other trade policies geared towards attracting foreign investors should be strategically deployed by the government, the government should create an enabling environment to encourage the inflow of foreign capital by the development of infrastructural facilities. There is also the need for a stable political environment to ensure the security of life and property.

References

  1. Akinremi (2017), Business day online publication. https://www.businessdayonline.com/business-economy/article/infrastructure-decay-insecurity-hinders-foreign-direct-investment-inflow-nigeria-study-reveals/

  2. Akpan E. S. and Eweke G. O. (2017), Foreign Direct Investment and Industrial Sector Performance: Assessing the Long-run Implication of Economic Growth in Nigeria. Journal of Mathematical Finance. 2017(7), p 391-411.

  3. Ayatoye, E., Arogundade, K., Adebisi, O. & Oluwakayode, E (2011). Foreign Direct Investment, Export and Economic Growth in Nigeria, European Journal of Humanities and Social Sciences. Vol. 2, No. 1

  4. Bonoyiour J. (2003). The Determining Factors of FDI, U.S.A, Hyman Publisher Ltd.

  5. CBN (2014). Statistical Bulletin. Central Bank of Nigeria.

  6. Clever, G. (2007).  Modern Macroeconomics. Port Harcourt. Pearl Publishers.

  7. Dickey, D.W & Fuller, W.A. (1981). Distribution of the Estimator for Autoregressive Time Series with a Unit Root. Journal of the American Statistical Association.

  8. Egbo O. (2010). The Place of FDI in the Development of Low Developing Countries: Lessons from Nigeria. The Nigerian Journal of Management and Research. Vol. 5, No.2. June 2010

  9. Ekpo, A. H. (1997).  Foreign Direct Investment in Nigeria: Evidence from Time Series Data. CBN Economic and Financial Review, 35(1), pp. 35 -42

  10. Gujuarati, D. (2004). Basic Econometric, New York, Tata McGraw Hill, Fourth Edition.

  11. Iyoha, M.A. (2004). Applied Econometrics. Benin City. Mindex Publishing,

  12. Jhinga, M. L. (2007). International Economics. New Delhi; Vrinda Publications (P) Ltd.

  13. Markusen, J. (1995). The Boundaries of Multinational Enterprises and the Theory of International Trade. Journal of Economic Perspectives. Vol 1,  pp 169-189

  14. Ngowi, H. P, (2001). Can Africa increase its global share of foreign direct investment (FDI). West Africa Review, Vol 2(2).

  15. Umuezuruike E. (2015). The Determinants of Foreign Direct Investment (FDI) Inflows in Nigeria: A Causality Analysis on Nigeria. Proceedings of 4th LASTEM International Conference, Amsterdam, Netherlands, 12th November 2015.

  16. UNCTAD, (2001). Trade and Investment Report. New York. United States

  17. Uzoka, C. I (2012). The Impact of Foreign Direct Investment on Nigeria Economic Growth. Caritas University, Enugu.

About Us

The Asian Institute of Research is an online and open-access platform to publish recent research and articles of scholars worldwide. Founded in 2018 and based in Indonesia, the Institute serves as a platform for academics, educators, scholars, and students from Asia and around the world, to connect with one another. The Institute disseminates research that is proven or predicted to be of significant influence for the general public.

Contact Us

Please send all inquiries to the email:

editorial@asianinstituteofresearch.org

Business Address:

5th Floor, Kavling 507, Fajar Graha Pena Tower, Jl. Urip Sumohardjo No.20, Makassar, Indonesia 90234

Copyright © 2018 The Asian Institute of Research. All rights reserved