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Causality effect of capital market indicators on foreign investment model in Nigeria and South Africa (1980-2013)

Author

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  • Onuorah Anastasia Chi-Chi, Ebiringa
  • Oforegbunam Thaddeus
  • Okoli Margaret Nnenna

    (Department of Accounting, Banking and Finance, Delta State University, Delta State, Nigeria)

Abstract

This study examined causal effects of economic indicators attracting foreign investment inflows in Nigeria and South Africa. The purpose of the study is to investigate the behavioural pattern of economic indicators and determinants of economic indicators of capital market model influencing foreign investment inflows these two countries. The data were sourced from various economic and statistical bulletins of each country. Diagnostic test and Granger causality tests were the main econometric techniques for the analysis. The findings confirmed that for both countries; total value of transaction (TVT) and market capitalisation (MCAP) are the main economic indicators of capital market model (CMD) attracting foreign investment (FI). The study concluded that the identified economic indicators of CMD influenced FI in a short-run equilibrium relationship except interest rate having long-run equilibrium with foreign investment in South Africa. It is recommended that substantial approach and workable policy formulation and implementation in the stock exchange market to improve quality portfolio is highly needed to attract foreign investors in the global financial market.

Suggested Citation

  • Onuorah Anastasia Chi-Chi, Ebiringa & Oforegbunam Thaddeus & Okoli Margaret Nnenna, 2015. "Causality effect of capital market indicators on foreign investment model in Nigeria and South Africa (1980-2013)," International Journal of Innovation and Economic Development, Inovatus Services Ltd., vol. 1(2), pages 7-12, June.
    • Handle: RePEc:mgs:ijoied:v:1:y:2015:i:2:p:7-12
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    More about this item

    Keywords

    Foreign investment; Capital market; Granger causality; Industrialisation and Investment; Market capitalization;
    All these keywords.

    JEL classification:

    • M00 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - General - - - General

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