Nigeria as a country given her magnanimous natural resource base and large market size qualifies to be one of the major recipients of FDI in Africa. Journal of Business Economics and Finance, International Journal of Management, Economics and Social Sciences, Noble International Journal of Economics and Financial Research, Asian Journal of Advanced Research and Reports, Agu, Anthony Ogbonna, Ogu Calistus, Ezeanyeji Clement I, Oziengbe Aigheyisi, Akomen Hillary Isikhuemen, JOURNAL OF ACADEMIC RESEARCH IN ECONOMICS, Jalingo journal of social and management sciences, Investment Management and Financial Innovations, Peterson K Ozili, PhD, Asma Salman Ph.D, ChFP, VCD, CFM, Qaisar Ali, Nigerian Defence Academy Journal of Economics and Finance, European Xtramile Centre of African Studies WP/21/016, Foreign direct investment and the environment: Pollution haven hypothesis revisited, FOREIGN DIRECT INVESTMENT AND ITS IMPACT ON ECONOMIC GROWTH: AN EMPIRICAL STUDY ON AFRICAN COUNTRIES. To determine if there is any observed long run relationship between economic growth and foreign direct investment in Nigeria. Academia.edu no longer supports Internet Explorer. International trade is also known to be an instrument of economic growth. The main objective of this study is to investigate the effect of foreign direct investment on economic growth in the short run and in the long run for . HEALTH EXPENDITURE AND ECONOMIC GROWTH IN NIGERIA. The Impact of Foreign Direct Investment on the Economic Growth in Cambodia: Empirical Evidence Khun Sokang Faculty of Management and Tourism, Cambodian Mekong University, Phnom Penh, Cambodia Abstract: The foreign direct investment (FDI) inflows are often seen as the important catalyst for economic growth in the developing countries. Therefore, policy makers and economists seek to identify the factors that affect FDI in different sectors. A growth model via the Ordinary Least Square method was used to ascertain the relationship between FDI and economic growth in Nigeria. of foreign direct Investment. Granger causality test was also employed to determine the direction of causality between FDI and economic growth in Nigeria. Foreign direct investment (FDI) is defined as an investment involving a long-term relationship and reflecting a lasting interest and control by a resident entity in one economy (foreign direct investor or parent enterprise) in an enterprise resident in an economy other than that of the foreign direct investor (FDI) enterprise or affiliate enterprise or foreign affiliate []. On the basis of these, it was recommended that more sectors of the economy be deregulated so as to encourage more investor participation in the productive sector of the economy. Findings from the existing studies have been mixed. The results highlight that FDI inflows contribute to the Australian economy including a growth in GDP, export performance and employment. Many of the studies (Berthlemy & Demurger, 2000; Li & Liu, 2005; Pradhan, Arvin, Hall, Bennett, & Bahmani, 2017; Rehman, 2016) have provided empirical substantiation for growth spurring effects of FDI. This study reviews the implication of FDI for different regional blocs in Africa. In most developing countries, Foreign Direct Investment (FDI) serves as a means of earning foreign reserves via investments, businesses and foreign aids from advanced countries. To browse Academia.edu and the wider internet faster and more securely, please take a few seconds toupgrade your browser. Sorry, preview is currently unavailable. Enter the email address you signed up with and we'll email you a reset link. The goal of this paper is to study the effects of foreign direct investment (FDI) on the economic growth of ten new member states (NMS) from Central and Eastern Europe (CEE), which joined the European Union (EU) in 2004 and 2007 - the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia, Slovenia, Bulgaria and Romania. It is an unalienable fact that FDI plays a vital role in any economy regardless of its level of development. A number of studies have been conducted on the Impact of Foreign Direct Investment on Economic Growth, with . Accordingly, it is advised that in formulating foreign policy, policy makers should take strategic views on the international economy and make new creative policies that will foster economic integration between Nigeria and its existing trade allies. This study assesses the impact of foreign direct investment (FDI) inflows on economic growth and domestic investment in a panel of Economic Co-operation and Development (OECD) countries during the period of 1990-2017 by utilizing the method of fixed-effects and system generalized method of moments (GMM). For instance, the major component that drives economic integration is foreign investment. Managing the Process of Removing Capital Controls: What Does the Literature Suggest? Secondary data sourced mainly from CBN publications were used in the OLS and granger causality regression equations conducted for the period 1986 to 2010. The impact of foreign direct investment on the host country's economic growth has been a source of debate in past theoretical and empirical investigations. To browse Academia.edu and the wider internet faster and more securely, please take a few seconds toupgrade your browser. I advocate for policies that promote inward FDI if our country is to meet its economic growth targets. Most economic rationale for franting special incentives for attracting foreign direct investment is based on the belief that foreign direct investment bridges the gap between the rich and poor nations in addition to the generation of technological transfers. The contribution of foreign direct investment (FDI) to economic growth in host countries cannot be overemphasized. The Spillover effect also allows for the transfer of innovations and invention to the receiving countries, one of which Nigeria belongs. The major objective of this study is to investigate the impact of foreign direct investment on Nigeria economic growth at large. Foreign investment accelerate the pace of economic growth, increase employment and technological level of the economy. The study showed that Foreign direct investment has significant impact on the economic growth of Nigeria between 1990 and 2016 (32 years). The paper also analyses the impact of other macro economic factors on Gross Domestic product. Proved, that foreign direct investment have dual impact on economic development. Based on this view, FDI has a spillover on all firms thereby boosting the productivity of the entire economy. This paper examined both the total effect and the individual effects of the sources of capital inflow [foreign direct investment (FDI), official development assistance (ODA), remittances and debt] as well as capital outflow (capital flight) on economic growth for 33 countries in Sub-Saharan Africa (SSA) for the period spanning 1970 to 2010. The result of the OLS techniques indicates that FDI has a positive and insignificant impact on the growth of Nigerian economy for the period under study. FDI is considered a valuable source of finance and capital formation, Technology-Transfer and know-how, as well as a viable medium for trade among countries. Abstract J. ADELEGAN - FOREIGN DIRECT INVESTMENT For years, it has been dinned into the governments of developing countries that financial liberalization is essential for prosperity. Downloadable (with restrictions)! To learn more, view ourPrivacy Policy. BRICS and MINT also need to ensure that their economies absorb substantial skills and technology spillovers from FDI inflow to promote sustainable long-term economic growth by investing more in their human capital. According to the requirement for accelerated growth in association with the Sustainable Development Goals is not completely clear, however, for economies to experience sustainable and inclusive development, cross-border trade is paramount (UNCTAD, 2019). Economy of West Bengal West Bengal is the primary business and financial hub of Eastern India. The amount of FDI inflow into Nigeria has reached US$2.23 billion in 2003 and it rose to US$5.31 billion in 2004 (a 138% increase) this figure rose again to US$9.92 billion (an 87% increase) in 2005. 2021, Journal of Management, Economics, and Industrial Organization. Interest rate was found to be positive and insignificant while exchange rate positively and significantly affects the growth of Nigeria economy. Therefore it was suggested that African governments should consider unusual polices that would increase FDI in Africa. Master's Thesis - University of Bridgeport, The North American Journal of Economics and Finance, American Journal of Agricultural Economics, Okore Amah, John Onoh, Ugwuegbe Ugochukwu, International Journal of Economics and Finance. Presently, Nigeria is the first host economy of FDI in SubSaharan Africa, and the third in the continent. SIGNIFICANCE OF THE RESEARCH PROBLEM. Therefore, this study contributes to the existing literature by investigating the effects of FDI both on the owner, and the host country, using Nigeria as a case study. Foreign Direct Investment Affect Economic GrowthPoverty Reduction Policies and . GFCF which was used as a proxy for domestic investment has a positive and significant impact on economic growth. Trade facilitates more efficient production of goods and services by shifting production to countries that have comparative advantage in producing them. We would expect capital to flow from capital rich to capital poor countries as suggested in the Heckscher-Ohlin apprroach to trade by Mundell (1957), because capital is scarce in developing countries and should lead to profitable investment oppurtunities for capital in developing countries. The regression result also showed that other variables in the model gross fixed capital formation (GFCF), net exports (NXP), consumer price index (CPI), and exchange rate (EXR) impacted on the GDP. We use Heritage Foundation economic freedom index data over the . Finding revealed that FDI predict 54 per cent variation in economic growth in Africa. Keywords: foreign direct investment, economic growth. GFCF which was used as a proxy for domestic investment has a positive and significant impact on economic growth. Since its obvious that one of the fundamental keys to economic growth and development is foreign investment, this study further explains how foreign investment affects economic stability. Economic reforms introduced after 1991 brought foreign competition, led to privatisation of certain public sector industries, opened up sectors hitherto reserved for the public sector and led to an expansion in the production of fast-moving consumer goods. In most developing countries, Foreign Direct Investment (FDI) serves as a means of earning foreign reserves via investments, businesses and foreign aids from advanced countries. The study is significant because it contributes to literature on determinants of FDI by extending the scope of previous studies which often focus only on BRICS. Key Words: Foreign Direct Investment, Economic Growth, Technological Transfer * Department of Economics, University of South Africa, P.O Box 392, UNISA, 0003, Pretoria, South Africa . Foreign Direct Investment in turn is believed to be an engine of economic development in that it brings about the transfer of technology, managerial skills, international production, access to markets, etc. The Impact of Foreign Direct Investment on the Nigerian Economy Okore Amah, John Onoh, Ugwuegbe Ugochukwu This study investigates the empirical relationship between Foreign Direct Investment and economic growth in Nigeria. The state primarily dependent on agriculture and medium-sized industry. Enter the email address you signed up with and we'll email you a reset link. 2.) At the third quarter of 2019, the FDI was only 3.37% (USD 200.08 million) of the total capital inflow for the period. The findings were reinforced by the presence of a long-term equilibrium relationship, as evidenced by the cointegrating equation of the VECM. Foreign direct investment can be seen as the basis upon which the general advancement of a nation is based on. FDI was found to have a significant effect on growth in North Africa but had no significant effect in East, Southern and West Africa. Keywords: Foreign direct investment, economic growth and employment 1. 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View PDF PDF View EPUB EPUB; . The Model ascertained that globalization variables actually positively impacted on stock market performance. FDI is an important vehicle of technology transfer from developed countries to developing countries. The work and category of FDI has changed significantly since India has opened up to world markets. Instead of discouraging foreign investors, they were advised to open up so as to have access to global savings that could be invested in order to grow fast. The primary objective of our study is investigating the impact of FDI on economic growth in Eastern African countries and see the determinants of FDI in the region. The objective can futher be classified as: 1.) , Imperial College London Scholarship for 2023 (Apply, University Of Chicago Scholarship 2023(Apply Now). The role of capital in economic growth is still regarded as very crucial as both the theory of big push and the concept of vicious cycle attest to the crucial role of capital in the growth process. Academia.edu no longer supports Internet Explorer. 2021, Journal of Management, Economics, and Industrial Organization. Sorry, preview is currently unavailable. Further study includes the role of technology in managing waste activities' repercussions. 37-47. The scope of this study is limited to the data obtained from World bank indicator, Central bank of Nigeria (CBN) Annual statistics bulletin and the National Bureau of statistics on foreign direct investment sector between 1990 and 2016. The data for the study was tested for unit root using Augmented Dickey Fuller (ADF) test. Furthermore, the results also indicated that capital flight and debt constituted significant drags on growth, while the exact impact of ODA was uncertain. First, it uses pooled time-series cross sectional analysis to estimate the model on determinants of FDI for three samples: BRICS only, MINT only, and BRICS and MINT combined; then, random effects model is also employed to estimate the model for BRICS and MINT combined. Paradigms: A Research Journal of Commerce, Economics and Social Sciences ISSN 1996-2800, 2013, Vol. According to the requirement for accelerated growth in association with the Sustainable Development Goals is not completely clear, however, for economies to experience sustainable and inclusive development, cross-border trade is paramount. 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You can download the paper by clicking the button above. The first chapter will discuss the introduction to this study , including the background of study, research questions, objectives of study and the significance of the study. The results show that market size, infrastructure availability, and trade openness play the most significant roles in attracting FDI to BRICS and MINT while the roles of availability of natural resources and institutional quality are insignificant. Introduction st December, 2015 in which portfolio investment accounted for 54%, direct investment 24%, other investment 16% and financial derivatives for 6%. NEW EVIDENCE. This has been noted by several authors since the early 80s; for instance, Lall 1983,; Kumar 1995; Page 1988, e.t.c. Therefore, this study contributes to the existing literature by investigating the effects of FDI both on the owner, and the host country, using Nigeria as a case study. This study employs panel analysis to examine the determinants of foreign direct investment (FDI) in Brazil, Russia, India, China, and South Africa (BRICS) and Mexico, Indonesia, Nigeria, and Turkey (MINT) using data for eleven years i.e. Introduction The relationship between Foreign Direct Investment (FDI) and economic growth has been an interested issue for You can download the paper by clicking the button above. FDI is an important vehicle of technology transfer from developed countries to developing countries. 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However, the findings reveal that while net capital inflows and participation in international capital market have greater impact on the Nigerian Stock market performance during the period under review. This part of the research study deals with the introduction of of the study. Finally, government agencies in Africa should engage the service of FDI experts in designing policies and steps that will increase inflows of FDI in Africa. . Impacts of FDI on Developing Countries Growth and Development There is a largeness of empirical studies which examined the role of FD development of LDC ranging from its impact on the growth and distribution o income to the economic desirability of technology brought in by MNC, its cu political impact. The study seeks the verification of the existence of a linking mechanism between globalization through trade openness, net inflow of capital, participation in international capital market and financial development on Stock Market performance over the period of 1981 to 2011. We employed the structure equation model on two income groups of countries in Africa, the low and middle income, over 1990-2019. What impact does foreign direct investment have on the Nigerian economy? A cross-sectional research design was used to obtain a panel data set for 56 countries in Africa from the period of 1993-2012. This study investigated the empirical relationship between FDI and economic growth in Nigeria. They provide effective integration of the national economy in the world, the spread of innovation and increased productivity. It has received 3 citation(s) till now. Foreign direct investment (FDI) and trade are often seen as important catalysts for economic growth in the developing countries. It'll try to esatblish the trends of inflow of investment into the country. Therefore, government should provide an enabling environment that will encourage foreign investors to invest in Nigeria economy by addressing the security challenges in the country, providing investment friendly environment by improved regulatory framework as well as encourage domestic investment. The result of the granger causality test showed a bi-directional causality between FDI and GDP, that is, each granger cause the other. It was concluded that FDI has positive significant impact on economic growth in Africa. The study examines the effect of globalisation on the economic performance of developing nations with particular reference to Nigeria. The Impact of Foreign Direct Investment on the Economic Growth in Cambodia: Empirical Evidence 0 Empirical study By leap_bojan on December 30, 2018 INTERNATIONAL JOURNAL OF INNOVATION AND ECONOMIC DEVELOPMENT Citation Download PDF Cite Suggested articles Article Views: 14,618 International Journal of Innovation and Economic Development BY 1, Investment, Inflation and Economic Growth: Empirical Evidence From Nigeria, Causal Relationship between FDI and Economic Growth of Nigeria, FOREIGN DIRECT INVESTMENT AND ECONOMIC GROWTH IN NIGERIA:AN EMPIRICAL EVIDENCE, The Effect of Exchange Rate and Inflation on Foreign Direct Investment and Its Relationship with Economic Growth in Nigeria, Endogenous Determination of FDI Growth and Economic Growth:The OECD Case, DETERMINANTS OF BALANCE OF PAYMENTS DYNAMICS IN ZIMBABWE, The Nexus Among Foreign Direct Investment, Capital Flight and Economic growth: Evidence from Ethiopia, The Effects of Membership of Currency Unions on Foreign Direct Investment (FDI) Movement, Effect of Globalization on Nigeria Stock Exchange and Capital Market Liberation on Economic Growth (1981 2011), THE IMPACT OF INSECURITY ON FOREIGN DIRECT INVESTMENTS: EVIDENCE FOR NIGERIA, Foreign Direct Investment (FDI) and Economic Growth in East African Countries. Okore Amah, John Onoh, Ugwuegbe Ugochukwu. Although, its one of the top three leading African countries that consistently received FDI in the past decade. The impact of FDI on economic growth has been extensively researched empirically. Again the cointegration test shows that there is a long run relationship between the variables in the study. To browse Academia.edu and the wider internet faster and more securely, please take a few seconds toupgrade your browser. its finances and economy, it is referred to as foreign investment. Measuring the Regional Eects of FDI in Africa. The aim of this paper was an attempt to estimate the impact of foreign direct investment on economic growth and employment in South Africa for a period of 24 years, thus from 1990 to 2013. , , . The major component that drives economic integration is foreign investment. Presently, Nigeria is the first host economy of FDI in Sub-Saharan Africa, and the third in the continent. Given that FDI inflow to a country has the potential of being mutually beneficial to the investing entity and host government, the challenge is on how BRICS and MINT can sustain the level of FDI inflow and ensure it results in economic growth and socio-economic transformation. The implications of the findings are that even though trade openness seems to be a major factor driving FDI. The study employs the Ordinary Least Square (OLS) method to analyze the model adopted, in which Gross Domestic Product is used as a proxy to measure economic performance, and depends on the degree of openness, exchange rate, and foreign direct investment which are indices of globalisation. The survey, which is not exhaustive, only covers those FDI issues, which deals mainly with the direct employment consequences in the host developing countries. The UNCTAD World Investment Report 2006 shows that FDI inflow to West Africa is mainly dominated by inflow to NIgeria, who received 70% of the sub-regional total and 11% of Africas total. The Impact of Foreign Direct Investment on Economic Growth in Nigeria. Evidence from the South China Sea and Implications on Philippine Economic Strategy, Title: The Location Determinants of FDI IN Sudan: Time Series-Empirical Analysis from 1980-2018, Financial Openness and Foreign Direct Investment in Nigeria: New Evidence. The study results could be useful to scholars who study the dynamics surrounding FDI disbursement and strategies on how FDI can drive growth in developing countries. The methodology involves estimating augmented endogenous growth model using panel data for the period 1975-1999. The study examined the impact of foreign direct investment on economic growth and development, using the time frame 1990 and 2016 (32 years). Foreign Direct Investment, Economic Growth and Unemployment in Nigeria, Impact of Foreign Direct Investment on Economic Growth in Nigeria (1986-2017): Evidence of Oil Sector, Determinants of Manufacturing Growth in Nigeria, EXPORT DETERMINANTS OF CHINA'S FDI IN AFRICA: EMPIRICAL EVIDENCE FROM OIL/MINERALS EXPORTING AFRICAN COUNTRIES, The impact of major macroeconomic variables on foreign direct investment in Nigeria: evidence from a wavelet coherence technique, Foreign Portfolio Investment and Economic Growth in Nigeria. Academia.edu uses cookies to personalize content, tailor ads and improve the user experience. The work covered a period of 1981-2009 using an annual data from Central Bank of Nigeria statistical bulletin. This will encourage meaningful investments in the economy; The Central Bank of Nigeria should come-up with policies that will help to stabilize the Naira exchange rate vis--vis the major currencies of the world, like the United States Dollar; There is need to have a stable political and economic environment and improve on the critical infrastructure, level of security at all levels in the country; Systems of governance should be based on accountability, transparency, effective and efficient resource; Government needs to liberalize the foreign sector in Nigeria so that all barriers to trade such as arbitrary tariffs; import and export duties and other levies should be reduced so as to encourage investors. Although FDI coefficient in the regression result showed that about 13% of variations in GDP are accounted for by a percent increase in FDI, their relationship is statistically insignificant. The article was published on 2011-01-01 and is currently open access. Chapter three will consist of the methodology and data. The study found that foreign direct investment exerted a negative while human capital development has a positive impact on the gross domestic product per capita in the region. Foreign Direct Investment (FDI) and Economic Growth: an approach in terms of cointegration for the case of Tunisia, FOREIGN DIRECT INVESTMENT AND ITS EFFECT TO SUSTAINABLE GDP, An Evaluation of the Impact of Nigeria's Trade and Investment Policy Reforms. The aim of the study is to investigate the Impact of Foreign Direct Investment on economic growth in Ethiopia by using annual time series data from the periods of 1982 to 2018. FDI was also found not to be driving growth in the whole of Africa in a significant manner. The paper's main objective is to evaluate the repercussions of economic growth, industrialization, and foreign direct investment (FDI) on OECD (Organization for Economic Cooperation and Development) municipal solid waste (MSW) from 2000-2020. Itll try to esatblish the trends of inflow of investment into the country. The Spillover effect also allows for the transfer of innovations and invention to the receiving countries, one of which Nigeria belongs. These policies are focused on improving the industrial sector, and of course, results in austerity. This study which is an assessment of the impact of foreign direct investment on economic growth will be important to policy makers, investors, researchers, firms, governments and it's agencies, students to formulate new policies, modify existing ones and to help attract foreign investors. To achieve this objective the Descriptive and Econometric analysis were processed. In particular, it appears that the globalization and regionalization of international economy have made FDI incentives more interesting and important for national governments. West Bengal have Jute industry, Tea industry. Traditionally, FDI is designed to improve the recipient economies thereby enhancing economic growth and development, it is in this view that many developing countries attract foreign investors with the hope of strengthening their economy by increasing the foreign investment portfolio. The analysis showed that FDI has a statistically significant and positive impact on GDP in the Western Balkan countries, and is a key precondition for intensifying foreign trade. This study assesses the impact of foreign direct investment (FDI) inflows on economic growth and domestic investment in a panel of Economic Co-operation and Development (OECD) countries during the period of 1990-2017 by utilizing the method of fixed-effects and system generalized method of moments (GMM). The researchs objectives, hypothesis, scope and limitations would be stated. While some reserchers suggest a positive effect, others found a negative effect. CAPITAL FLOWS-GROWTH NEXUS IN NIGERIA: HAS FOREIGN DIRECT INVESTMENT PLAYED A ROLE IN ACCELERATING ECONOMIC GROWTH? Overall, empirical evidence in the last few decades indicates that FDI flows have been growing at a pace far exceeding the volume of international trade. To empirically investigate the impact of foreign direct investment on the economic growth of Nigeria. future consumption, investment or for unforeseen contingencies, is considered as an indispensable weapon for economic growth and development. Our analysis, based on cross sectional data of a sample of 66 developing counties over three decades, indicates that FDI and trade contribute significantly towards advancing economic growth in developing countries. 3.) In addition to the direct capital financing it supplies, foreign direct investment can be a source of valuable technology and know-how while fostering the linkages with local firms which can help jumpstart an economy (Melnyk, Kubatko and Pysarenko, 2014). Enter the email address you signed up with and we'll email you a reset link. Nigeria is one of the economies with great demand for goods and services and has attracted some FDI over the years. The findings show that FDI inflows are positively and . Enter the email address you signed up with and we'll email you a reset link. Oseghale and Amonkhienan (1987) found that foreign direct investment is positively associated with GDP, concluding that greater inflow of FDI will spell a better economic performance for the country. The flow is not channeled towards productive use, rather it is used to supplement consumption, substitute for saving and devoted to the importation of consumer goods and services at the expense of investments and exports. To browse Academia.edu and the wider internet faster and more securely, please take a few seconds toupgrade your browser. CAUSALITY NEXUS BETWEEN FOREIGN DIRECT INVESTMENT AND ECONOMIC GROWTH: EMPIRICAL EVIDENCE FROM GHANA AND CHINA. For a developing country like Nigeria, foreign direct investment is considered a way of transferring technology and capital from other developed and even developing countries to the dosmestic economy. FDI also stimulates domestic investment and facilitates improvements in human capital and institutions in the host countries. This, of course, is with a view to further attracting remittances and FDI into SSA. How Does Foreign Direct Investment Really Affect Developing Countries' Growth? Out of this Nigerias oil sector alone received 90% of the FDI inflow. 1. Traditionally, FDI is designed to improve the recipient economies thereby enhancing economic growth and development, it is in this view that many developing countries attract foreign investors with the hope of strengthening their economy by increasing the foreign investment portfolio. Foreign direct investment from developing countries has increased tremendously over the past two decades. INTRODUCTION For Kenya and other developing countries, attracting Foreign Direct Investments (FDI) has been a key aspect of its outward-oriented development strategy, as investment is considered a crucial element for output growth and employment The Impact of Foreign Direct Investment on Economic Growth and Development 1990 to 2016. The article focuses on the topic(s): Foreign direct investment & Developing country. There have been many controversies regarding the effect of foreign direct investment on the growth of the host countrys economy. However, the level of FDI attracted by Nigeria is mediocre compared with the resource base and potential need (Asiedu, 2003). This provides tentative answers to research questions subject to proof or otherwise by the evidence from the study. NEW EVIDENCE. According to Yu, Ning, Tu, Younghong and Tan (2011) FDI is considered to be one of the major channels of technological transfer. The work covered a period of 1981-2009 using an annual data from Central Bank of Nigeria statistical bulletin. 1, pp. Would it have a positive or negative effect both in the long-run and short-run? Is there any observed long run relatonship between the economic growth and foreign direct investment in Nigeria? chapters explore the potential of FDI to create new growth opportunities for local Can foreign direct investment (FDI) promote growth in Africa? Does foreign direct investment accelerate economic growth, FOREIGN DIRECT INVESTMENT AND ECONOMIC GROWTH IN DEVELOPING COUNTRIES, Theoretical and methodological study on dynamic growth regions and factors explaining their growth performance, FINANCIAL SECTOR DEVELOPMENT AND ECONOMIC GROWTH: AN EMPIRICAL ANALYSIS OF DEVELOPING COUNTRIES, Financial Sector Development and Economic Growth: The Case of Ghana, Benefits and costs of international financial integration: theory and facts. We also explore the mediation impact of . To ascertain the casual relationship that exists between foreign direct and Nigeria economic growth. The role of foreign direct investment (FDI) to create competition, technology transfer, reducing unemployment and generating productive economic growth is undeniable. The feature that has a positive impact on economic growth of the wealthy countries is called as: MCQ PDF 26 to learn Economics online course with balance of payment, foreign direct investments, and interest rates answers for Business Courses Online (BBA). Most foreign direct investments have been by Asian frims establishing footholds in other Asian countries but there have also been investments in developed countries such as the EU. Hence the working hypothesis of the study is stated below: H0 : There is no significant impact of foreign direct investment on the economic growth of Nigeria. It was discovered that there is a negative FDI - growth linkage in Nigeria. Abstract: This paper aims to assess the impact of Foreign Direct Investment and Trade Openness on the Economic growth of Bangladesh taking into consideration annual data from 1992-2020. Most countries highly sought after FDI because it has been viewed as a major stimulus to economic growth in developing countries. Since the late 1980s and 1990s, the FDI inflows have increased rapidly almost around the world, and it is very important for less developed countries to support development and economic growth. Data generated from UNCTAD, FDI/TNC database were analysed using correlation, regression and OLS. Recently, Nigeria has witnessed several trade policies which aim at diversifying the economy away from oil revenue. Research Journal of Finance and Accounting, Journal of Business Economics and Finance. To sustain the level of FDI inflow, governments of BRICS and MINT need to ensure that their countries remain attractive for investment. FDI has a positive influence on output, but not significant, suggesting the poor performance of FDI on economic growth in Nigeria. Romer (1993) argues that idea gaps exists between the rich and the poor countries and foreign investment can ease the transfer of technology and business understanding of the poorer countries. FDI is considered a valuable source of finance and capital formation, Technology-Transfer and know-how, as well as a viable medium for trade among countries. JEL Classification Numbers: F14, O12, O40, O53 Keywords: Foreign Direct Investment, Economic Growth, South Korea I. This study. The key policy implication drawn from the results is for policy makers to design policies that would curb the incidence of capital flight and ensure an investment friendly environment. IISTE Journal of Economics and Sustainable Development, Developing countries, Nigeria inclusive, face a shortage of investible funds and hence strive to attract foreign direct investment (FDI) because of its acknowledged potentials as a tool of economic development. What does the inflow of investment hold for African emerging economies? West Bengal is rich in minerals like coal. What is the casual relationship that exists between the foreign direct investment amd the Nigerian econnomic growth? However, the special merits of the foreign direct investment are being questioned particularly the kinds of incentives offered to foreign firms in practice. This study will consist of various chapters. Applied Econometrics and International Development. A Panel Group Means Analysis, How do Investors respond to Territorial Disputes? Also, the government should stimulate local production and diversify the nations export base. ABSTRACT This study examined foreign direct investment and its impact on economic growth in Africa. FDI also stimulates domestic investment and facilitates improvements in human capital and institutions in the host countries. Earlier studies (for instance, Otepola, 2002; Oyejide, 2005; Akinho, 2004) examines only the importance of FDI on growth and the channels through which it may be benefitting the economy. This study examines the impact of Foreign Direct Investment inflows on the growth of Nigerian economy. H1 : There is a significant impact of foreign direct invstment on the economic growth of Nigeria. By using our site, you agree to our collection of information through the use of cookies. The study revealed that globalisation has a significant positive impact on the economic performance/growth of Nigeria. Boyd and Smith (1992) however argued to the contrary. This paper analyzes the impact of Foreign Direct Investment on GDP in Zimbabwe, post dollarization period. Keywords: foreign direct investments, productivity, industry sectors, tradeable, non-tradeable sector, gross domestic product, economic impacts, export performance, economic growth 1. IMPACT OF TRADE OPENNESS AND MACROECONOMIC VARIABLES ON GDP GROWTH OF PAKISTAN. Does foreign direct investment promote , Journal of Sustainable Development in Africa. Nigeria, International Journal of Management, Economics and Social Sciences, Asian Journal of Advanced Research and Reports, Zik Journal of Multidisciplinary Research, Oziengbe Aigheyisi, Akomen Hillary Isikhuemen, JOURNAL OF ACADEMIC RESEARCH IN ECONOMICS, Jalingo journal of social and management sciences, Nigerian Defence Academy Journal of Economics and Finance, Bivariate Causality Analysis on the Impact of FDI Inflows and Economic Growth in Nigeria, FOREIGN DIRECT INVESTMENTS IN EAST AFRICAN REGION, A weighted least squares analysis of globalization and the Nigerian stock market performance, Regional Integration and Foreign Direct Investment: The Case of Latin America, Determinants of Foreign Direct Investment in Fast-Growing Economies: A Study of BRICS and MINT, FOREIGN DIRECT INVESTMENT AND MANUFACTURING SECTOR GROWTH IN NIGERIA, Economic Growth and Foreign Direct Investment in Nigeria: An Empirical Investigation, A weighted least squares analysis of globalisation and the Nigerian stock market performance, The Impact of Foreign Direct Investment on the Nigerian Economy, Determinants of Capital Flight in Bangladesh: an Econometric Estimation, INSECURITY, FOREIGN DIRECT INVESTMENT AND ECONOMIC GROWTH IN NIGERIA, FOREIGN DIRECT INVESTMENT (FDI) AND THE GROWTH OF NON OIL SECTOR: REVISITING THE NIGERAN EXPERIENCE. Annual time series data were collected from the Central Bank of Nigeria (CBN) Statistical Bulletin from 1980 to 2010. 1.) However, most empirical analysis of the impact of FDI on economic growth advises otherwise, hence, a controversy. African countries that have low FDI levels should try as much as possible to get better environment for business, ensure better legal system, provide good administrative process and reduce corruption so as to attract FDI. Foreign Direct Investment (FDI) has been further described as the long term investment reflecting a lasting interest and control by a foreign direct investor or parent enterprise of an enterprise entity resident in an economy other than that of the foreign investor (IMF, 1999). Since the independence of India, The Green Revolution bypassed the state. The Remarkable Impact of Foreign Direct InvestmentForeign Direct Investment in the World EconomyImpact Foreign . According to the existing literature, some empirical results found a negative relationship between FDI and economic growth, while others opined that as FDI increases, it results in a boost of output productivity, hence a positive relationship between the variables (Emmanuel, 2016). Saetak. In 2018, the total FDI inflow to the country was around USD 1.9 billion, while in 2017, FDI inflow was around USD 3.5 billion, showing a decrease due to the consequence of the austerity measures imposed in 2018. Abstract on The Impact of Foreign Direct Investment on Economic Growth and Development 1990 to 2016, Chapter One of The Impact of Foreign Direct Investment on Economic Growth and Development 1990 to 2016, Understanding Bath University Acceptance Rate (2023-2026), Online Degree Programs 2023- (Take Advantage of, Has Fulafia Started Giving Admission for 2022/2023? The study employed in its analysis, the unit root test to test for . Introduction Econometric evidence further shows that FDI has positive relationship with economic growth in Nigeria. You can download the paper by clicking the button above. The OLS regression revealed that FDI together with explanatory variables of gross fixed capital formation and FDI as a percentage of GDP predict 89 per cent variation in economic growth in Africa. Sorry, preview is currently unavailable. Although some FDI promotion efforts are probably motivated by temporary macroeconomic problems such as low growth rates and rising unemployment, there are also more fundamental explanations for the increasing emphasis on investment promotion in years. H1 : There is a significant impact of foreign direct invstment on the economic growth of Nigeria. The study suggested that; The government should improve the state of infrastructures inthe country. El ALCA y el destino de la inversin extranjera directa, EMPIRICAL ANALYSIS OF FDI AND TAX INCENTIVES ON THE ECONOMIC GROWTH IN THE REPUBLIC OF MACEDONIA, THE EFFECTS OF FOREIGN DIRECT INVESTMENT ON ECONOMIC GROWTH: THE CASE OF TANZANIA, Globalization and Liberalization Policies and their Impact on Growth: The Case of Tanzania, Capital account liberalization and foreign direct investment, Does FDI Accelerate Economic Growth? Academia.edu no longer supports Internet Explorer. Interest Rate and exchange rate were also added as control variables in the model. Yasar, M and Paul, C.J.M., 2006. It recommends that the government should continually ensure a business-friendly environment to encourage foreign participation in investment. This study investigates the empirical relationship between Foreign Direct Investment and economic growth in Nigeria. Yanruni, W., 1999. Al-Qantara, Volume, 8, Issue, 2, 2022 201 Impact of Foreign Direct Investment and Information Communication Technology on Economic Growth: An Empirical Analysis from Selected Developing Countries Recently, Nigeria has witnessed several trade policies which aim at diversifying the economy away from oil revenue. Its role is reflected in capital formation through increase capital stock and the impact it makes on the capacity to generate more and higher income. It reviews the empirical literature on the impact of FDI on employment, which has already been carried out in specific sectors, specific firms and specific countries. Foreign Direct Investment has very significant positive impact on economic growth. Wheeler and Mody (1992) also supports the view of Boyd and Smith (1992). To attain the objective, this paper has conducted statistical analyses of the relationships between FDI and its impact on selected macroeconomic indicators such as Gross Domestic Product,. that the transfer of high technology and knowledge has an adverse impact on South Korean economic growth. The OECD Experience Based on Panel Data Estimates for the Period 1980-2004, Estimating the FDI impact on economic growth and export performances of the european economies in transition, THE IMPACT OF ODA, FDI AND REMITTANCES ON LIVING STANDARDS IN DEVELOPING COUNTRIES: DOES INCOME LEVEL MATTER, The FDI-Growth Nexus in Latin America: The Role of Source Countries and Local Conditions, Impact of Foreign Direct Investment and Trade on Economic Growth: Evidence from Developing Countries, OUT OF CAVEATS: THE IMPACT OF FOREIGN DIRECT INVESTMENT ON GROWTH IN TRANSITION ECONOMIES, Foreign Direct Investment as Technology Transferred: Some Panel Evidence from the Transition Economies. Information on the background of foreign direct investment (FDI) in as well as its problems will be disscussed. Foreign direct investment is an investment made by an individual or a company (an investor) in a country which is not the country of origin of the investor, in the form of establishing business or acqurirng assets in the country. Poor domestic markets were still preventing many African economies from taking full advantage of the gains from foreign direct investment. It is usually considered the central element for the process of growth and developement. In 2018, the total FDI inflow to the country was around USD 1.9 billion, while in 2017, FDI inflow was around USD 3.5 billion, showing a decrease due to the consequence of the austerity measures imposed in 2018. Between 1975 and 1995, the aggregate stock of FDI rose from 4.5% to 9.7% of world GDP, with sales of foreign affiliates of multinational entreprises substancially exceeding the value of world exports (Barrell and Pain, 1997). 3.) However, most empirical analysis of the impact of FDI on economic growth advises otherwise, hence, a controversy. It is recommended that Nigeria evolve investor friendly policies that can attract foreign direct investments and enhanced the country's productivity and growth. HEALTH EXPENDITURE AND ECONOMIC GROWTH IN NIGERIA. The findings indicate that Chinese FDI has a considerable and robust impact on Pakistan's economic growth (Khathlan, 2012;Antwi et al., 2013), and others back up our findings. These policies are focused on improving the industrial sector, and of course, results in austerity. Chapter two consists the review of literature and will include the conceptual review, theoretical framework and the review of empirical literature. 'Foreign direct investment and economic growth in China', Journal of Asian Economics, 11(2000):471-475. Impact of Foreign Direct Investment & Domestic Investment on Economic Growth of Malaysia However, in another study, Lean and Tan (2010) replaced the export by FDI as the other factor in the two . Mining and quarrying has been identified as an attractive. This study aims to explain the importance of this research paper in the economy. This has fueled high prospect that FDI may serve up as a channel to advanced economic growth. Neo-classical researchers regard foreign direct investment and international capital flows as closing the savings gap in developing countries (e.g Chenery and Bruno, 1962). (2013), FDI's ability to deal with two major obstacles; namely . Finally, chapter five will consist of conclusion and recommendation. Academia.edu no longer supports Internet Explorer. The methodology adopted examines the stochastic characteristics of each time series by testing their stationarity using the Im, Pesaran and Shin W-stat test. We show that FDI interacts positively with trade and stimulates domestic investment. The Ordinary Least square (OLS) method approach was employed to assess the model in the long run. Many policy makers and academics argue that foreign direct investment can have robust effect on the hosts economic devcelopment. Such innovative policies will also assist to create avenues for the making new trade agreements with other nations of the world, which hitherto were not trade partners with Nigeria. The results indicate that foreign direct investment has marginally significant positive effect on economic growth. What Does FDI In ow Mean For Emerging African Economies? AbstractThe purpose of this research is to examine the economic freedom (EF) along with its macroeconomic determinants impact on Foreign Direct Investment (FDI) inflow in South Asia, East Asia, Latin America, Middle East, and North Africa, Northern Europe, Southern Europe, Western Europe, Eastern Europe and Sub Saharan Africa. Specifically, we address the following objectives: Identifying FDI's short run and long run contribution to economic growth in East Africa. It was established in the study that before the introduction of appropriate foreign investment, all sector funds were grossly mismanaged, contracts were awarded based on connection rather than on merit and high occurrence of corruption in all sectors in Nigerian. The economy of a country is impacted in numerous ways by FDI, gross domestic product, exchange rates, and government policies; nevertheless, foreign investment has the biggest effect on. This study examined the impact of foreign direct investment (FDI) inflows on economic growth in Nigeria from 1970 to 1995 using a seemingly unrelated model. 7, No. Foreign Direct Investment (FDI) is assumed to benefit a poor country like Sri Lanka, not only by supplementing domestic investment, but also in terms of employment creation, transfer of. You can download the paper by clicking the button above. It is usually considered the central element for the process of growth and development. The study c0oncluded that foreign direct investment has significant impact on the economic growth of Nigeria between 1990 and 2016 (32 years). Using system generalised method of moments (Sys-GMM), the findings showed that FDI and remittances significantly contributed to growth with the latter taking the lead. Interest rate was found to be positive and insignificant while exchange rate positively and significantly affects the growth of Nigeria economy. This study aims to explain the importance of this research paper in the economy. Journal of economics and development, department of economics, Umaru Musa Yar'adua University, Katsina. Since foreign investment has been seen as an important instrument tool to be used by the government to improve the economy, the appropriate growth from oil sector, power sector etc have strengthened all sectors in Nigeria economy and minimize the incidence. According to UNCTAD 2005, promoting and facilitating technological transfer through foreign investment has assumed prominent place in the strategies of economic revival and gowth being advocated by policy makers at the national, regional and the international levels because it is considered to be the key to bridging the technology and resource gap of underdeveloped countries and avoiding futher build-up of debt. The success of foreign investments in the country mainly is determined by the market size, human capital, and stable macroeconomic environment, and influenced largely by the pull factor and the push factors. The study empirically investigates the impact of globalization on the performance of the Nigerian Stock market. The question that comes to mind is, do these FDIs actually contribute to economic growth in Nigeria? Are the determinants of FDI different for different regional blocs in Africa? 'Impact of foreign direct investment and trade on economic growth: Evidence from developing countries . The data used was annual time series of variables computed from natural logarithms of gross domestic product (GDP) at current prices, net inflow of Foreign Direct Investment (FDI), inflation rate . Keywords: Foreign Direct Investment (FDI), Economic Growth, Special Economic Zones. One of the major economic problem in less developed countries is low capital formulation to finance the necessary investment for growth. from 1977 2011. 2.) FDI is a composite package that includes physical capital . Foreign direct investment (FDI) has risen considerably in post-reform India. Almsafir (2014). The characteristics of FDI are that it shows a fewer volatility degree and has an irregular pro-cyclical behaviour. This paper examines the effect of foreign direct investment on economic growth in Sub-Sahara African countries. Sorry, preview is currently unavailable. International trade is also known to be an instrument of economic growth. The ADF result shows that all the variable in the study are stationary. 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