Foreign Direct Investment and the Nigerian Economy: An Empirical Analysis

Muhammed Akpai Amade; Peter Luke Oyigebe

doi:doi:10.11648/j.ijebo.20241202.11

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Foreign Direct Investment and the Nigerian Economy: An Empirical Analysis

Muhammed Akpai Amade^*, Peter Luke Oyigebe

Published in International Journal of Economic Behavior and Organization (Volume 12, Issue 2)

Received: 10 February 2024 Accepted: 5 March 2024 Published: 2 April 2024

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Abstract

The primary motive of this paper was to investigate the impact of Foreign Direct Investment on economic growth of Nigeria from 1985 to 2022. Ex – post facto research design was carefully carried out; annual time series data were extracted from Central Bank of Nigeria Statistical Bulletin of 2021 and World Development Indicator. Real Gross Domestic Product (RGDP) was used as the dependent variable proxy for economic growth. Foreign Direct Investment (FDI), Exchange Rate (EXCR), Trade Openness (TOPN) and Inflation (INF) all denoted for explanatory variables of the study. The estimated coefficients of the variables under study displayed that all the variables are integrated of the same order 1(1) exception of Foreign Direct Investment which was integrated of order 1(0). The bound test conducted showed that there is proof of the presence of a long run correlation among the variables used while the causality test clearly showed that FDI granger causes economic growth in Nigeria under review. Other diagnostic tests seen in this paper are unit root test, descriptive statistics, correlation coefficient matrix, Cointegration test and test of Normality respectively, and they long-established the validity and reliability of the model used. Based on the inferential results revealed by the research work, the paper came up with recommendation that government should improve the investment climate for both domestic and foreign investors through adequate infrastructural development, soft loans and tax holidays.

Published in	International Journal of Economic Behavior and Organization (Volume 12, Issue 2)
DOI	10.11648/j.ijebo.20241202.11
Page(s)	46-66
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2024. Published by Science Publishing Group

Keywords

Economic Growth, Foreign Direct Investment, Inflation, Nigeria, ARDL

References

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Amade, M. A., Oyigebe, P. L. (2024). Foreign Direct Investment and the Nigerian Economy: An Empirical Analysis. International Journal of Economic Behavior and Organization, 12(2), 46-66. https://doi.org/10.11648/j.ijebo.20241202.11

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Amade, M. A.; Oyigebe, P. L. Foreign Direct Investment and the Nigerian Economy: An Empirical Analysis. Int. J. Econ. Behav. Organ. 2024, 12(2), 46-66. doi: 10.11648/j.ijebo.20241202.11

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Amade MA, Oyigebe PL. Foreign Direct Investment and the Nigerian Economy: An Empirical Analysis. Int J Econ Behav Organ. 2024;12(2):46-66. doi: 10.11648/j.ijebo.20241202.11

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@article{10.11648/j.ijebo.20241202.11,
  author = {Muhammed Akpai Amade and Peter Luke Oyigebe},
  title = {Foreign Direct Investment and the Nigerian Economy: An Empirical Analysis
},
  journal = {International Journal of Economic Behavior and Organization},
  volume = {12},
  number = {2},
  pages = {46-66},
  doi = {10.11648/j.ijebo.20241202.11},
  url = {https://doi.org/10.11648/j.ijebo.20241202.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijebo.20241202.11},
  abstract = {The primary motive of this paper was to investigate the impact of Foreign Direct Investment on economic growth of Nigeria from 1985 to 2022. Ex – post facto research design was carefully carried out; annual time series data were extracted from Central Bank of Nigeria Statistical Bulletin of 2021 and World Development Indicator. Real Gross Domestic Product (RGDP) was used as the dependent variable proxy for economic growth. Foreign Direct Investment (FDI), Exchange Rate (EXCR), Trade Openness (TOPN) and Inflation (INF) all denoted for explanatory variables of the study. The estimated coefficients of the variables under study displayed that all the variables are integrated of the same order 1(1) exception of Foreign Direct Investment which was integrated of order 1(0). The bound test conducted showed that there is proof of the presence of a long run correlation among the variables used while the causality test clearly showed that FDI granger causes economic growth in Nigeria under review. Other diagnostic tests seen in this paper are unit root test, descriptive statistics, correlation coefficient matrix, Cointegration test and test of Normality respectively, and they long-established the validity and reliability of the model used. Based on the inferential results revealed by the research work, the paper came up with recommendation that government should improve the investment climate for both domestic and foreign investors through adequate infrastructural development, soft loans and tax holidays.
},
 year = {2024}
}

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TY  - JOUR
T1  - Foreign Direct Investment and the Nigerian Economy: An Empirical Analysis

AU  - Muhammed Akpai Amade
AU  - Peter Luke Oyigebe
Y1  - 2024/04/02
PY  - 2024
N1  - https://doi.org/10.11648/j.ijebo.20241202.11
DO  - 10.11648/j.ijebo.20241202.11
T2  - International Journal of Economic Behavior and Organization
JF  - International Journal of Economic Behavior and Organization
JO  - International Journal of Economic Behavior and Organization
SP  - 46
EP  - 66
PB  - Science Publishing Group
SN  - 2328-7616
UR  - https://doi.org/10.11648/j.ijebo.20241202.11
AB  - The primary motive of this paper was to investigate the impact of Foreign Direct Investment on economic growth of Nigeria from 1985 to 2022. Ex – post facto research design was carefully carried out; annual time series data were extracted from Central Bank of Nigeria Statistical Bulletin of 2021 and World Development Indicator. Real Gross Domestic Product (RGDP) was used as the dependent variable proxy for economic growth. Foreign Direct Investment (FDI), Exchange Rate (EXCR), Trade Openness (TOPN) and Inflation (INF) all denoted for explanatory variables of the study. The estimated coefficients of the variables under study displayed that all the variables are integrated of the same order 1(1) exception of Foreign Direct Investment which was integrated of order 1(0). The bound test conducted showed that there is proof of the presence of a long run correlation among the variables used while the causality test clearly showed that FDI granger causes economic growth in Nigeria under review. Other diagnostic tests seen in this paper are unit root test, descriptive statistics, correlation coefficient matrix, Cointegration test and test of Normality respectively, and they long-established the validity and reliability of the model used. Based on the inferential results revealed by the research work, the paper came up with recommendation that government should improve the investment climate for both domestic and foreign investors through adequate infrastructural development, soft loans and tax holidays.

VL  - 12
IS  - 2
ER  -

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Muhammed Akpai Amade

Department of Economics, Federal University, Lokoja, Nigeria

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Peter Luke Oyigebe

Department of Political Science, Federal University, Lokoja, Nigeria

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Amade, M. A., Oyigebe, P. L. (2024). Foreign Direct Investment and the Nigerian Economy: An Empirical Analysis. International Journal of Economic Behavior and Organization, 12(2), 46-66. https://doi.org/10.11648/j.ijebo.20241202.11

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Amade, M. A.; Oyigebe, P. L. Foreign Direct Investment and the Nigerian Economy: An Empirical Analysis. Int. J. Econ. Behav. Organ. 2024, 12(2), 46-66. doi: 10.11648/j.ijebo.20241202.11

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Amade MA, Oyigebe PL. Foreign Direct Investment and the Nigerian Economy: An Empirical Analysis. Int J Econ Behav Organ. 2024;12(2):46-66. doi: 10.11648/j.ijebo.20241202.11

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@article{10.11648/j.ijebo.20241202.11,
  author = {Muhammed Akpai Amade and Peter Luke Oyigebe},
  title = {Foreign Direct Investment and the Nigerian Economy: An Empirical Analysis
},
  journal = {International Journal of Economic Behavior and Organization},
  volume = {12},
  number = {2},
  pages = {46-66},
  doi = {10.11648/j.ijebo.20241202.11},
  url = {https://doi.org/10.11648/j.ijebo.20241202.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijebo.20241202.11},
  abstract = {The primary motive of this paper was to investigate the impact of Foreign Direct Investment on economic growth of Nigeria from 1985 to 2022. Ex – post facto research design was carefully carried out; annual time series data were extracted from Central Bank of Nigeria Statistical Bulletin of 2021 and World Development Indicator. Real Gross Domestic Product (RGDP) was used as the dependent variable proxy for economic growth. Foreign Direct Investment (FDI), Exchange Rate (EXCR), Trade Openness (TOPN) and Inflation (INF) all denoted for explanatory variables of the study. The estimated coefficients of the variables under study displayed that all the variables are integrated of the same order 1(1) exception of Foreign Direct Investment which was integrated of order 1(0). The bound test conducted showed that there is proof of the presence of a long run correlation among the variables used while the causality test clearly showed that FDI granger causes economic growth in Nigeria under review. Other diagnostic tests seen in this paper are unit root test, descriptive statistics, correlation coefficient matrix, Cointegration test and test of Normality respectively, and they long-established the validity and reliability of the model used. Based on the inferential results revealed by the research work, the paper came up with recommendation that government should improve the investment climate for both domestic and foreign investors through adequate infrastructural development, soft loans and tax holidays.
},
 year = {2024}
}

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TY  - JOUR
T1  - Foreign Direct Investment and the Nigerian Economy: An Empirical Analysis

AU  - Muhammed Akpai Amade
AU  - Peter Luke Oyigebe
Y1  - 2024/04/02
PY  - 2024
N1  - https://doi.org/10.11648/j.ijebo.20241202.11
DO  - 10.11648/j.ijebo.20241202.11
T2  - International Journal of Economic Behavior and Organization
JF  - International Journal of Economic Behavior and Organization
JO  - International Journal of Economic Behavior and Organization
SP  - 46
EP  - 66
PB  - Science Publishing Group
SN  - 2328-7616
UR  - https://doi.org/10.11648/j.ijebo.20241202.11
AB  - The primary motive of this paper was to investigate the impact of Foreign Direct Investment on economic growth of Nigeria from 1985 to 2022. Ex – post facto research design was carefully carried out; annual time series data were extracted from Central Bank of Nigeria Statistical Bulletin of 2021 and World Development Indicator. Real Gross Domestic Product (RGDP) was used as the dependent variable proxy for economic growth. Foreign Direct Investment (FDI), Exchange Rate (EXCR), Trade Openness (TOPN) and Inflation (INF) all denoted for explanatory variables of the study. The estimated coefficients of the variables under study displayed that all the variables are integrated of the same order 1(1) exception of Foreign Direct Investment which was integrated of order 1(0). The bound test conducted showed that there is proof of the presence of a long run correlation among the variables used while the causality test clearly showed that FDI granger causes economic growth in Nigeria under review. Other diagnostic tests seen in this paper are unit root test, descriptive statistics, correlation coefficient matrix, Cointegration test and test of Normality respectively, and they long-established the validity and reliability of the model used. Based on the inferential results revealed by the research work, the paper came up with recommendation that government should improve the investment climate for both domestic and foreign investors through adequate infrastructural development, soft loans and tax holidays.

VL  - 12
IS  - 2
ER  -

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