IDEAS home Printed from https://ideas.repec.org/a/dug/actaec/y2023i5p139-151.html
   My bibliography  Save this article

Foreign Direct Investment, Domestic Capital Formation and Economic Growth of Nigeria

Author

Listed:
  • Oluwabunmi Dada

    (Ekiti State University)

  • Joel Sylvester Ahmodu

    (Ekiti State University)

  • Kehinde Omolade Daramola

    (Federal University Oye Ekiti)

Abstract

The low level of domestic capital formation experienced in most developing economies coupled with the desire for sustainable economic growth has necessitated the need to seek assistance in the form of foreign direct investment (FDI) to bridge the savings-investment gap. This study, therefore, examined the impact of FDI and domestic capital formation on the economic growth of Nigeria. Data were sourced from CBN statistical bulletin from 1986-2021 using Autoregressive distributed lag coupled with Granger causality tests. The result showed that domestic capital formation has an insignificant positive impact on economic growth while FDI revealed an insignificant negative relationship. Exchange rate, interest rate, and inflation rate showed an insignificant negative relationship with the economic growth of Nigeria. It was therefore recommended that governments at various levels should create an enabling environment conducive to domestic capital formation and investment process bearing in mind the stability of macroeconomic variables in the country. More so, Nigerian government should look inward, rely less on foreign direct investment and develop the country’s infrastructure facility to aid investment.

Suggested Citation

  • Oluwabunmi Dada & Joel Sylvester Ahmodu & Kehinde Omolade Daramola, 2023. "Foreign Direct Investment, Domestic Capital Formation and Economic Growth of Nigeria," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 19(5), pages 139-151, October.
    • Handle: RePEc:dug:actaec:y:2023:i:5:p:139-151
    as

    Download full text from publisher

    File URL: https://dj.univ-danubius.ro/index.php/AUDOE/article/view/2492/2636
    Download Restriction: no
    ---><---

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:dug:actaec:y:2023:i:5:p:139-151. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Daniela Robu (email available below). General contact details of provider: https://edirc.repec.org/data/fedanro.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.