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Does Source of Foreign Direct Investment Matter for Nigeria's Economic Growth?

Author

Listed:
  • Nkechinyere Uwajumogu

    (Department of Economics and Development Studies, Alex Ekwueme Federal University, Ndufu-Alike, Ebonyi State, Nigeria,)

  • Richard O. Ojike

    (Department of Economics and Development Studies, Alex Ekwueme Federal University, Ndufu-Alike, Ebonyi State, Nigeria,)

  • Innocent C. Ogbonna

    (Department of Economics, Ebonyi State University, Ebonyi State, Nigeria)

Abstract

Foreign Direct Investment (FDI) is one of the sources used as a wedge to bridge the saving-financial requirement gap and many policies and programmes are mapped out to attract FDI in Nigeria. The study was aimed at examining whether source of FDI matter for growth in Nigeria. Using Autoregressive Distributed Lag (ARDL) bound test model, we disaggregated FDI sources to determine individual impact, and then add interest rate and exchange rate to capture macroeconomic conditions of the economy. The results show while inflow from Asian and African countries had significant and positive impact on GDP growth rate, FDI from USA and EU countries had the opposite effect. Therefore, the impacts of FDI indeed differs depending on the country of origin and this is caused by differences in market structures of host country and country of origin, business system, institutions, policy formulation process, organizational features, level of development etc.

Suggested Citation

  • Nkechinyere Uwajumogu & Richard O. Ojike & Innocent C. Ogbonna, 2018. "Does Source of Foreign Direct Investment Matter for Nigeria's Economic Growth?," International Journal of Economics and Financial Issues, Econjournals, vol. 8(6), pages 46-53.
    • Handle: RePEc:eco:journ1:2018-06-7
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    References listed on IDEAS

    as
    1. Chan Sok GEE & Mohd Zaini Abd KARIM, 2011. "Fdi´S Country Of Origin And Output Growth: The Case Of Malaysia?S Manufacturing Sector, 1991-2006," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 11(1).
    2. Levy Yeyati, Eduardo & Panizza, Ugo & Stein, Ernesto, 2007. "The cyclical nature of North-South FDI flows," Journal of International Money and Finance, Elsevier, vol. 26(1), pages 104-130, February.
    3. Dalila Nicet-Chenaf & Eric Rougier, 2014. "Source and host country volatility and FDI: A gravity analysis of European investment to Middle East and North Africa," Working Papers hal-00985795, HAL.
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    Cited by:

    1. Abdul Rehman & Hengyun Ma & Sufyan Ullah Khan & Muntasir Murshed & Muhammad Kamran Khan & Fayyaz Ahmad & Muhammad Zubair Chishti, 2023. "Do Exports of Communication Technology, Food, Manufacturing, and Foreign Investments Foster Economic Growth in Pakistan? an Exploration From Asymmetric Technique," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 14(4), pages 4238-4255, December.
    2. Garedew Aweke Gizaw & Negash Haile Dedeho & Tariku Lorato Lodamo, "undated". "The nexus between foreign direct investment, domestic investment and economic growth: Evidence from Ethiopia," Review of Socio - Economic Perspectives 202188, Reviewsep.

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    More about this item

    Keywords

    Foreign Direct Investment; Autoregressive Distributed Lag; Source country; host country;
    All these keywords.

    JEL classification:

    • F6 - International Economics - - Economic Impacts of Globalization
    • O2 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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