Title: Constraints to Foreign Direct Investment:The Nigerian Experience (1980 - 2015 )
Abstract: Foreign Direct Investment is considered as an
invaluable tool for achieving economic growth in developing
countries. In order to achieve the objective of a higher rate of
economic growth and the efficiency in the utilization of resources,
developing countries the world over have embarked upon various
policy measures at attracting FDI. The study is an empirical
investigation (using a time series data between 1980-2015) into
the factors that constrain the inflow of FDI into the Nigeria
economy. The Phillip Perron (PP) unit root test was used to test
stationarity of the variables, Johansen Co-integration approach
was conducted to test for long run relationship between the
variables used, Vector Error Correction Model was used to
establish the short run dynamics and the long run relationship as
well as ascertain the speed of systemic adjustment in the model.
The study found that government external and domestic debts,
inflation rate and exchange rate appreciation (in favour of the
domestic currency) have significant long run relationship with
foreign direct investment in Nigeria. It therefore recommends
among others a more prudent management of both domestic and
external debt of Nigeria and that our monetary authorities
should devise effective ways of fine-tuning and managing such
macroeconomic tools and variables as the rate of inflation and
exchange rate.
Publication Year: 2016
Publication Date: 2016-05-11
Language: en
Type: article
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