Foreign Direct Investment and Economic Output in Nigeria (1984-2019)
##plugins.themes.bootstrap3.article.main##
##plugins.themes.bootstrap3.article.sidebar##
Published
Jun 21, 2022
Copyright Information
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
Abstract
Most developing nations need foreign support in order to fill their infrastructural gap. This is also true for Nigeria. One major source of foreign inflow is the Foreign Direct Investment (FDI). This study examines the impact of FDI on economic output, measured by real GDP, in Nigeria while accounting for the moderating impact of Inflation Rate (INFR), Interest Rate (INTR) and Exchange Rate (EXR). Using Autoregressive Distributed Lag (ARDL) Model, the findings suggest that FDI have a significant positive impact on real GDP only at one period lag. The study recommends that government should encourage FDI inflow for long term project in order for its benefit to be maximized in Nigeria.
Metrics
Metrics Loading ...
##plugins.themes.bootstrap3.article.details##
Keywords
Foreign Direct InvestmentEconomic OutputInflation RateExchange Rate
References
• Adelegan, J. O. (2000). Foreign direct investment & economic growth in NIGERIA: A Seemingly Unrelated Model. African Review of Money, Finance and Banking, 3(3), 5-25.
• Adeleke, K. M., Olowe, S. O. & Fasesin, O. O. (2014). Impact of foreign direct investment on Nigeria economic growth. International Journal of Academic Research in Business and Social Sciences, 4(8), 234 – 242. http://hrmars.com/hrmars_papers/Impact_of_Foreign_Direct_Inve stment_on_Nigeria_Economic_Growth.pdf
• Adeolu, B. A. (2007). FDI & economic growth: evidence from NIGERIA. African Economic Research Consortium (AERC) Paper 165, 2(4), 2-49
• Adigwe, P., Ezeagba, C & Francis, N (2015). Effect of foreign direct investment on Nigerian economic growth, European Journal of Research and Reflection in Management Sciences, 3(5), 1-7
• Ahmed N, Hayat M.F, Luqman M &Ullah S (2012). The causal links between foreign direct investment & economic growth in Pakistan. European Journal of Business and Economics, 2(6), 21-22
• Alabi, K.O. (2019). The Impact of foreign direct investment on economic growth: Nigeria Experience. Open Journal of Applied Sciences, 9, 372-385. Retrieved from https://www.scirp.org/pdf/OJAppS_2019052715314570.pdf
• Ali, U., Shan, W., Wang, J. J., & Amin, A. (2018). Outward foreign direct investment and economic growth in china: evidence from asymmetric ARDL approach. Journal of Business Economics and Management, 19(5), 706–721. https://doi.org/10.3846/jbem.2018.6263
• Amassoma D. & Ogbuagu, M. J (2014). FDI, Private Investment And Public Investment In Nigeria: An Unravelled Dynamic Relation. Journal of Economic Cooperation & Development, 36(4), 1. https://jbepnet.com/journals/Vol_1_No_2_December_2014/3.pdf
• Anyanwu, A. B. (2007). Foreign direct investment and economic growth: Evidence from Nigeria. Research paper 165 presented at African economic research consortium, Nairobi, Kenya.
• Arain, K., Qureshi, N.A., Suthar, V., Pirzado, A.B., Khanzada, A.H., Baloch, A.B., Ahmed, I. & Memon, A.K. (2021). Impact of foreign direct investment on economic growth in Pakistan, International Journal of Management (IJM), 12(4), 41-55.
• Awortu, T. C. (2018). Monetary policy operation in Nigeria from 1980 to 2016. International Journal of Advanced Research. 6(10), 462-506 DOI:10.21474/IJAR01/7831
• Billas, V. (2020). FDI and economic growth in EU13 countries: Cointegration and causality tests. Journal of Competitiveness, 12(3), 47–63. https://doi.org/10.7441/joc.2020.03.03
• Carbonell, J. B., & Werner, R. A. (2018). Does foreign direct investment generate economic growth? A new empirical approach applied to Spain. Economic Geography, 94(4), 425–456. https://doi.org/10.1080/00130095.2017.1393312
• Chanegriha, M, Stewart, C. & Tsoukis, C. (2020). Testing for causality between FDI and economic growth using heterogeneous panel data. The Journal of International Trade & Economic Development, 29 (5), 546-565
• Cicea, C., & Marinescu, C. (2020). Bibliometric analysis of foreign direct investment and economic growth relationship. Journal of Business Economics and Management, 22(2), 445–466. https://doi.org/10.3846/jbem.2020.14018
• Colen S.D. (2009). Multinational Corporations & Foreign Direct Investment. Oxford university press.
• Dell'Ariccia, G., Rabanal, P. and Sandri, D. (2018). Unconventional monetary policies in the Euro Area, Japan, and the United Kingdom. Journal of Economic Perspectives, 32 (4): 147-72.DOI: 10.1257/jep.32.4.147
• Dauda, R. O. (2007). The impact of FDI on Nigeria’s economic growth: trade policy matters. Journal of Business and Policy Research, Vol. 3 No.2, pp. 11 – 26
• Dutse, A.Y (2008). Nigeria’s economic growth: emphasizing the role of foreign direct investment in transfer of technology. Communications of the IBIMA, 2 (3),76- 83
• Ehimare, O. (2011). Foreign direct investment & its effect on theNigerian economy, Business Intelligence Journal, 2(4), 1-9
• Gatson, G & Issouf. S (2009).Impact of FDI on poverty reduction in AFRICA: are there regional differences, Sciences & Humanities Research Council of Canada” (SSHRC), 1(4), 1-45.
• Hagan, E., & Amoah, A. (2019). Foreign direct investment and economic growth nexus in Africa New evidence from the new financial fragility measure. African Journal of Economic and Management Studies, 11(1), 1–17. https://doi.org/10.1108/AJEMS-05-2019-0180
• Hill, C. (2009) International Business: Competing in the Global Marketplace, 7th ed. In international business strategy, prepared by Schell et al, Mcgraw-Hill custom publishing.
• Humanicki, M., Kelm, R., & Olszewski, K. (2013). Foreign Direct Investment and Foreign Portfolio Investment in the Contemporary Globalized World: Should they be still treated separately? Warszawa: Narodowy Bank Polski.
• Imleesh, R.M., Yanto, H. and Prajanti, S.D.W., 2017. The impact of macroeconomic indicators on economic growth in Indonesia, Malaysia and Singapore. Journal of Economic Education, 6(1), pp.19-28.
• Imoudu, C (2012): The impact of foreign direct investment on NIGRIA’s economic growth; 1980 2009: Evidence from the Johansen’s co-integration approach, International Journal of Business & Social Science, 3(6);1-13.
• Khan, M. B., Xie, H. B., & Saleem, H. (2019). Direct impact of inflow of foreign direct investment on poverty reduction in Pakistan: a bond testing approach. Economic Research Ekonomska Istrazivanja, 32 (1), 3647–3666. https://doi.org/10.1080/1331677X.2019.1670088
• Knill, A. M. (2005). Can foreign portfolio investment bridge the small firm financing gap around the world? World Bank Policy Research Working Paper, No. 3796, December.
• Kondyan, S., & Yenokyan, K. (2019). The effect of foreign direct investment on economic growth. Eastern Economic Journal, 45(4), 532–564. https://doi.org/10.1057/s41302- 019-00140-9
• Macaulay E. D (2012). Foreign direct investment and the performance of the Nigerian economy, Proceedings of the 1st International Technology, Education and Environment Conference published by African Society for Scientific Research (ASSR) and Human Resource Management Academic Research Society, 6(9), 6-33
• Makiela, K., & Ouattara, B. (2018). Foreign direct investment and economic growth: Exploring the transmission channels. Economic Modelling, 72, 296–305. https://doi.org/10.1016/j.econmod.2018.02.00
• Mojekwu, J. & Ogege, S. (2012). Foreign direct investment and the challenges of sustainable development in Nigeria, Journal of Research in International Business and Management, 2(7), 1-9.
• Ndem, S., Okoronkwo,O & Nwamuo, C (2014). The determinants of foreign direct investment and their impacts on Nigerian economy (1975 – 2010), Journal of Integrative Humanism, 2(3), 1-11.
• Nuzhat, F., (2009). Impact of foreign direct investment on economic growth in PAKISTAN. International Review of Business Research Papers. 5(5), 110-120.
• Nwankwo, O.G, Ademola, O. & Kehinde, O. (2013). Effects Of globalization on foreign direct investment in NIGERIA. Lorem Journal of Business and Economics (LJBE),1(1), 11-17.
• Obamuyi, T. M. (2009). An Investigation of the relationship between Interest rate and Economic growth in Nigeria, 1970-2006. Journal of economics and International Finance, 1(4), 93-98.
• Obiwona, B. (2004). Foreign direct investment for AFRICA in financing proper growth. African Economic Research Consortium. AERC Senior Policy Seminar papers, 60-95.
• Okpoto, S. I. (2015). Foreign Private Investment and the Nigeria’s Economic Growth (1980-2013). Journal of Policy and Development Studies, 9(3), 2015.
• Olokoyo, F. O. (2012). Foreign direct investment and economic growth: A case of Nigeria. Bvimsr’s Journal of Management Research, 4(1), 1 – 20. http://eprints.covenantuniversity.edu.ng/8989/1/Foreign%20Direct .pdf
• Olusanya, S (2013). Impact of foreign direct investment inflow on economic growth in a pre and post deregulated NIGERIA economy. A granger causality test, European Scientific Journal, 9 (25): 1-22.
• Omisakin, O., Adeniyi, O. & Omojolaibi, A. (2009). Foreign direct investment, trade openness and growth in Nigeria. Journal of Economic Theory, 3(2), 13-18.
• Onuorah, J.C (2012). Impact of Foreign direct investment on economic growth in NIGERIA. Interdisciplinary Journal of Contemporary Research In Business. 4(5), 64-75.
• Osei, M. J., & Kim, C. J. (2020). Foreign direct investment and economic growth: Is more financial development better? Economic Modelling, 93, 154–161. https://doi.org/10.1016/j. econmod.2020.07.009
• Otepola, S & Ayorinde. O (2002): FDI as a Factor of Economic Growth in Nigeria. Dakar, Senegal: African Institute for Economic Development and Planning (IDEP), 3(9): 20-33.
• Owusu-Nantwi, V & Erickson, C. (2019). Foreign direct investment and economic growth in South America. Journal of Economic Studies, 46(2), 383-398.
• Pooja, S. & R. Puri (2018). Exploration of relationship between FDI and GDP: A comparison between India and its neighbouring countries. Global Business Review: SAGE Journals. 21(2), 473-489. https://doi.org/10.1177/0972150918760026
• Prochniak, M. and Witkowski, B. (2012), Bayesian Model Averaging in Modelling GDP Convergence with the Use of Panel Data, Collegium of Economic Analysis Annals, (26), 45-60.
• Santana, R. (2013) Financial Reform, Monetary Policy and Banking Crisis in Dominican Republic. Archivo General de la Nacion, ISBN-13:978-9945074819.
• Thong, L.N. and Hao, N.T. (2019) The Harrod – Domar growth model and its implications for economic development in Vietnam. International Journal of Humanities Social Sciences and Education (IJHSSE), 6(4), 11-17. http://dx.doi.org/10.20431/2349-0381.0604003
• Ugochukwu, S (2013).The Impact of Foreign Direct Investment on the Nigerian Economy, European Journal of Business and Management, 5(2):1-10
• Umah, K.E. (2007), The Impact of Foreign Private Investment on Economic Development of Nigeria, Nigeria. Journal of Economics and Financial research. 1(3), 11-20.
• UNCTAD (2014). Foreign direct investment to Africa maintains momentum sustained by intra-African flows, UNCTAD Report.
• UNCTAD (2019). World Investment Report. Geneva: United Nations Conference on Trade and Development. https://unctad.org/en/PublicationsLibrary/wir2019_en.pdf
• Wang, X., Xu, Z., Qin, Y. & Skare, M. (2021). Foreign direct investment and economic growth: a dynamic study of measurement approaches and results, Economic Research-Ekonomska Istraživanja, 21, 1-24, DOI: 10.1080/1331677X.2021.1952090
• Yaqub J.O, Adam S. L. & Ayodele J (2013). Foreign Direct Investment and Economic Growth in Nigeria: An Empirical Analysis. American Academic & Scholarly Research Journal, 5(1), 74- 82.
• Adeleke, K. M., Olowe, S. O. & Fasesin, O. O. (2014). Impact of foreign direct investment on Nigeria economic growth. International Journal of Academic Research in Business and Social Sciences, 4(8), 234 – 242. http://hrmars.com/hrmars_papers/Impact_of_Foreign_Direct_Inve stment_on_Nigeria_Economic_Growth.pdf
• Adeolu, B. A. (2007). FDI & economic growth: evidence from NIGERIA. African Economic Research Consortium (AERC) Paper 165, 2(4), 2-49
• Adigwe, P., Ezeagba, C & Francis, N (2015). Effect of foreign direct investment on Nigerian economic growth, European Journal of Research and Reflection in Management Sciences, 3(5), 1-7
• Ahmed N, Hayat M.F, Luqman M &Ullah S (2012). The causal links between foreign direct investment & economic growth in Pakistan. European Journal of Business and Economics, 2(6), 21-22
• Alabi, K.O. (2019). The Impact of foreign direct investment on economic growth: Nigeria Experience. Open Journal of Applied Sciences, 9, 372-385. Retrieved from https://www.scirp.org/pdf/OJAppS_2019052715314570.pdf
• Ali, U., Shan, W., Wang, J. J., & Amin, A. (2018). Outward foreign direct investment and economic growth in china: evidence from asymmetric ARDL approach. Journal of Business Economics and Management, 19(5), 706–721. https://doi.org/10.3846/jbem.2018.6263
• Amassoma D. & Ogbuagu, M. J (2014). FDI, Private Investment And Public Investment In Nigeria: An Unravelled Dynamic Relation. Journal of Economic Cooperation & Development, 36(4), 1. https://jbepnet.com/journals/Vol_1_No_2_December_2014/3.pdf
• Anyanwu, A. B. (2007). Foreign direct investment and economic growth: Evidence from Nigeria. Research paper 165 presented at African economic research consortium, Nairobi, Kenya.
• Arain, K., Qureshi, N.A., Suthar, V., Pirzado, A.B., Khanzada, A.H., Baloch, A.B., Ahmed, I. & Memon, A.K. (2021). Impact of foreign direct investment on economic growth in Pakistan, International Journal of Management (IJM), 12(4), 41-55.
• Awortu, T. C. (2018). Monetary policy operation in Nigeria from 1980 to 2016. International Journal of Advanced Research. 6(10), 462-506 DOI:10.21474/IJAR01/7831
• Billas, V. (2020). FDI and economic growth in EU13 countries: Cointegration and causality tests. Journal of Competitiveness, 12(3), 47–63. https://doi.org/10.7441/joc.2020.03.03
• Carbonell, J. B., & Werner, R. A. (2018). Does foreign direct investment generate economic growth? A new empirical approach applied to Spain. Economic Geography, 94(4), 425–456. https://doi.org/10.1080/00130095.2017.1393312
• Chanegriha, M, Stewart, C. & Tsoukis, C. (2020). Testing for causality between FDI and economic growth using heterogeneous panel data. The Journal of International Trade & Economic Development, 29 (5), 546-565
• Cicea, C., & Marinescu, C. (2020). Bibliometric analysis of foreign direct investment and economic growth relationship. Journal of Business Economics and Management, 22(2), 445–466. https://doi.org/10.3846/jbem.2020.14018
• Colen S.D. (2009). Multinational Corporations & Foreign Direct Investment. Oxford university press.
• Dell'Ariccia, G., Rabanal, P. and Sandri, D. (2018). Unconventional monetary policies in the Euro Area, Japan, and the United Kingdom. Journal of Economic Perspectives, 32 (4): 147-72.DOI: 10.1257/jep.32.4.147
• Dauda, R. O. (2007). The impact of FDI on Nigeria’s economic growth: trade policy matters. Journal of Business and Policy Research, Vol. 3 No.2, pp. 11 – 26
• Dutse, A.Y (2008). Nigeria’s economic growth: emphasizing the role of foreign direct investment in transfer of technology. Communications of the IBIMA, 2 (3),76- 83
• Ehimare, O. (2011). Foreign direct investment & its effect on theNigerian economy, Business Intelligence Journal, 2(4), 1-9
• Gatson, G & Issouf. S (2009).Impact of FDI on poverty reduction in AFRICA: are there regional differences, Sciences & Humanities Research Council of Canada” (SSHRC), 1(4), 1-45.
• Hagan, E., & Amoah, A. (2019). Foreign direct investment and economic growth nexus in Africa New evidence from the new financial fragility measure. African Journal of Economic and Management Studies, 11(1), 1–17. https://doi.org/10.1108/AJEMS-05-2019-0180
• Hill, C. (2009) International Business: Competing in the Global Marketplace, 7th ed. In international business strategy, prepared by Schell et al, Mcgraw-Hill custom publishing.
• Humanicki, M., Kelm, R., & Olszewski, K. (2013). Foreign Direct Investment and Foreign Portfolio Investment in the Contemporary Globalized World: Should they be still treated separately? Warszawa: Narodowy Bank Polski.
• Imleesh, R.M., Yanto, H. and Prajanti, S.D.W., 2017. The impact of macroeconomic indicators on economic growth in Indonesia, Malaysia and Singapore. Journal of Economic Education, 6(1), pp.19-28.
• Imoudu, C (2012): The impact of foreign direct investment on NIGRIA’s economic growth; 1980 2009: Evidence from the Johansen’s co-integration approach, International Journal of Business & Social Science, 3(6);1-13.
• Khan, M. B., Xie, H. B., & Saleem, H. (2019). Direct impact of inflow of foreign direct investment on poverty reduction in Pakistan: a bond testing approach. Economic Research Ekonomska Istrazivanja, 32 (1), 3647–3666. https://doi.org/10.1080/1331677X.2019.1670088
• Knill, A. M. (2005). Can foreign portfolio investment bridge the small firm financing gap around the world? World Bank Policy Research Working Paper, No. 3796, December.
• Kondyan, S., & Yenokyan, K. (2019). The effect of foreign direct investment on economic growth. Eastern Economic Journal, 45(4), 532–564. https://doi.org/10.1057/s41302- 019-00140-9
• Macaulay E. D (2012). Foreign direct investment and the performance of the Nigerian economy, Proceedings of the 1st International Technology, Education and Environment Conference published by African Society for Scientific Research (ASSR) and Human Resource Management Academic Research Society, 6(9), 6-33
• Makiela, K., & Ouattara, B. (2018). Foreign direct investment and economic growth: Exploring the transmission channels. Economic Modelling, 72, 296–305. https://doi.org/10.1016/j.econmod.2018.02.00
• Mojekwu, J. & Ogege, S. (2012). Foreign direct investment and the challenges of sustainable development in Nigeria, Journal of Research in International Business and Management, 2(7), 1-9.
• Ndem, S., Okoronkwo,O & Nwamuo, C (2014). The determinants of foreign direct investment and their impacts on Nigerian economy (1975 – 2010), Journal of Integrative Humanism, 2(3), 1-11.
• Nuzhat, F., (2009). Impact of foreign direct investment on economic growth in PAKISTAN. International Review of Business Research Papers. 5(5), 110-120.
• Nwankwo, O.G, Ademola, O. & Kehinde, O. (2013). Effects Of globalization on foreign direct investment in NIGERIA. Lorem Journal of Business and Economics (LJBE),1(1), 11-17.
• Obamuyi, T. M. (2009). An Investigation of the relationship between Interest rate and Economic growth in Nigeria, 1970-2006. Journal of economics and International Finance, 1(4), 93-98.
• Obiwona, B. (2004). Foreign direct investment for AFRICA in financing proper growth. African Economic Research Consortium. AERC Senior Policy Seminar papers, 60-95.
• Okpoto, S. I. (2015). Foreign Private Investment and the Nigeria’s Economic Growth (1980-2013). Journal of Policy and Development Studies, 9(3), 2015.
• Olokoyo, F. O. (2012). Foreign direct investment and economic growth: A case of Nigeria. Bvimsr’s Journal of Management Research, 4(1), 1 – 20. http://eprints.covenantuniversity.edu.ng/8989/1/Foreign%20Direct .pdf
• Olusanya, S (2013). Impact of foreign direct investment inflow on economic growth in a pre and post deregulated NIGERIA economy. A granger causality test, European Scientific Journal, 9 (25): 1-22.
• Omisakin, O., Adeniyi, O. & Omojolaibi, A. (2009). Foreign direct investment, trade openness and growth in Nigeria. Journal of Economic Theory, 3(2), 13-18.
• Onuorah, J.C (2012). Impact of Foreign direct investment on economic growth in NIGERIA. Interdisciplinary Journal of Contemporary Research In Business. 4(5), 64-75.
• Osei, M. J., & Kim, C. J. (2020). Foreign direct investment and economic growth: Is more financial development better? Economic Modelling, 93, 154–161. https://doi.org/10.1016/j. econmod.2020.07.009
• Otepola, S & Ayorinde. O (2002): FDI as a Factor of Economic Growth in Nigeria. Dakar, Senegal: African Institute for Economic Development and Planning (IDEP), 3(9): 20-33.
• Owusu-Nantwi, V & Erickson, C. (2019). Foreign direct investment and economic growth in South America. Journal of Economic Studies, 46(2), 383-398.
• Pooja, S. & R. Puri (2018). Exploration of relationship between FDI and GDP: A comparison between India and its neighbouring countries. Global Business Review: SAGE Journals. 21(2), 473-489. https://doi.org/10.1177/0972150918760026
• Prochniak, M. and Witkowski, B. (2012), Bayesian Model Averaging in Modelling GDP Convergence with the Use of Panel Data, Collegium of Economic Analysis Annals, (26), 45-60.
• Santana, R. (2013) Financial Reform, Monetary Policy and Banking Crisis in Dominican Republic. Archivo General de la Nacion, ISBN-13:978-9945074819.
• Thong, L.N. and Hao, N.T. (2019) The Harrod – Domar growth model and its implications for economic development in Vietnam. International Journal of Humanities Social Sciences and Education (IJHSSE), 6(4), 11-17. http://dx.doi.org/10.20431/2349-0381.0604003
• Ugochukwu, S (2013).The Impact of Foreign Direct Investment on the Nigerian Economy, European Journal of Business and Management, 5(2):1-10
• Umah, K.E. (2007), The Impact of Foreign Private Investment on Economic Development of Nigeria, Nigeria. Journal of Economics and Financial research. 1(3), 11-20.
• UNCTAD (2014). Foreign direct investment to Africa maintains momentum sustained by intra-African flows, UNCTAD Report.
• UNCTAD (2019). World Investment Report. Geneva: United Nations Conference on Trade and Development. https://unctad.org/en/PublicationsLibrary/wir2019_en.pdf
• Wang, X., Xu, Z., Qin, Y. & Skare, M. (2021). Foreign direct investment and economic growth: a dynamic study of measurement approaches and results, Economic Research-Ekonomska Istraživanja, 21, 1-24, DOI: 10.1080/1331677X.2021.1952090
• Yaqub J.O, Adam S. L. & Ayodele J (2013). Foreign Direct Investment and Economic Growth in Nigeria: An Empirical Analysis. American Academic & Scholarly Research Journal, 5(1), 74- 82.
How to Cite
Lamidi, Lukuman O., Muideen A. Isiaka, and Nsikan Sam. 2022. “Foreign Direct Investment and Economic Output in Nigeria (1984-2019)”. Studies in Business and Economics 25 (1):22-35. https://doi.org/10.29117/sbe.2022.0133.
Section
Articles