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Foreign Direct Investment Inflows and Oil Price Fluctuations in Developing Oil Exporting Countries: the Case of Nigeria

Author

Listed:
  • Olawunmi Omitogun

    (Olabisi Onabanjo University)

  • Adedayo Emmanuel Longe

    (University of Ibadan)

  • Kayode Daniel Ajulo

    (University of Ibadan)

Abstract

The study investigates the impact of oil price fluctuations on foreign direct investment inflows in developing oil exporting countries using Nigeria as a case study by ARDL method and VECM granger causality test to analyse the data spanning from 1970 to 2015. It was observed that oil price fluctuations do not favour foreign direct investment in Nigeria both in the long-run and shortrun. This implies that as oil price changes foreign direct investment inflows falls. VECM granger causality test revealed that there is no direction of causality between oil price fluctuations and foreign direct investment inflows in Nigeria. We therefore concluded that oil price is not an important determinant of foreign direct investment inflows. The study recommends that government should take the advantage of times of positive change in the oil price to fix the needs to attract foreign direct investment inflows in the economy.

Suggested Citation

  • Olawunmi Omitogun & Adedayo Emmanuel Longe & Kayode Daniel Ajulo, 2018. "Foreign Direct Investment Inflows and Oil Price Fluctuations in Developing Oil Exporting Countries: the Case of Nigeria," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 14(2), pages 5-20, APRIL.
    • Handle: RePEc:dug:actaec:y:2018:i:2:p:5-20
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    File URL: http://journals.univ-danubius.ro/index.php/oeconomica/article/view/4655/4433
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    Keywords

    Oil price; FDI; ARDL; VECM;
    All these keywords.

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