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Impact of Foreign Direct Investment (Fdi) On the Stock Market Performances in Nigeria (1985-2014)

Author

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  • Omodero, Cordelia Onyinyechi
  • M.C. Ekwe

Abstract

The study examined the impact of Foreign Direct Investment (FDI) on the stock market performances in Nigeria, from 1985 ¨C 2014. The secondary data used were collected from IMF, International Financial Statistics (2015), CBN Statistical Books (2015). Multiple regression of least square estimation was the tool used to analyze the data in this study. In the model, the FDI was regressed on RGDP, Consumer Price Index, Real effective exchange rate, Money supply (M2), Share price index, Treasury bill, Nigerian stock exchange transactions. The study revealed that FDI has an insignificant and negative impact on the economy and the macroeconomic variables that determine the performances of the Nigerian stock market. The paper therefore recommends policies that would encourage foreign firms operating in the oil and gas including the telecommunication and agricultural sectors to be listed since it would go a long way in attracting more FDI, leading to improvement in the stock market performances.

Suggested Citation

  • Omodero, Cordelia Onyinyechi & M.C. Ekwe, 2017. "Impact of Foreign Direct Investment (Fdi) On the Stock Market Performances in Nigeria (1985-2014)," Applied Finance and Accounting, Redfame publishing, vol. 3(1), pages 36-48, February.
    • Handle: RePEc:rfa:afajnl:v:3:y:2017:i:1:p:36-48
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    References listed on IDEAS

    as
    1. Adam, Anokye M. & Tweneboah, George, 2008. "Macroeconomic Factors and Stock Market Movement: Evidence from Ghana," MPRA Paper 11256, University Library of Munich, Germany.
    2. Odili Okwuchukwu, 2015. "Exchange Rate Volatility, Stock Market Performance and Foreign Direct Investment in Nigeria," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 5(2), pages 172-184, April.
    3. Raymond Vernon, 1966. "International Investment and International Trade in the Product Cycle," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 80(2), pages 190-207.
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    Citations

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    Cited by:

    1. Gbenga Festus Babarinde, 2020. "The Role of Foreign Direct Investment in Stock Market Development in Nigeria: A Test of Complementarity," The Review of Finance and Banking, Academia de Studii Economice din Bucuresti, Romania / Facultatea de Finante, Asigurari, Banci si Burse de Valori / Catedra de Finante, vol. 12(2), pages 175-187, December.
    2. O. K. Adeleke, 2023. "FDI inflows and stock market development in Nigeria," Journal of Economic Policy and Management Issues, JEPMI, vol. 2(2), pages 19-30.
    3. Aastha Khera & Neelam Dhanda, 2020. "Empirical Relationship between Macroeconomic Variables and Stock Prices of Indian Banking Sector: A Vector Error Correction Model Approach," The Review of Finance and Banking, Academia de Studii Economice din Bucuresti, Romania / Facultatea de Finante, Asigurari, Banci si Burse de Valori / Catedra de Finante, vol. 12(2), pages 189-198, December.

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    More about this item

    Keywords

    Foreign Direct Investment (FDI); Stock Market performance; Macroeconomic variables; real effective exchange rate; Money Supply; Nigeria.;
    All these keywords.

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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