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Foreign direct investment and Nigeria’s economic growth : a sectoral analysis


  • Sunday Mauton A. Posu

    (Olabisi Onabanjo University, Nigeria)

  • O. Ismail Soile

    (Olabisi Onabanjo University, Nigeria)

  • A. O. B. Sangosanya

    (Olabisi Onabanjo University, Nigeria)

  • Sunday Mauton A. Posu

    (University of the West Indies, Jamaica)


Aggregate flows of foreign direct investment (FDI) to Nigeria, as in economies of the world, fall into different classified sectors of the economy. Studies on FDI in economic literature have been directed at the macroeconomic effects of FDI on economic growth. As sound as the findings of such studies appear, the growth impacts that FDI flows create on each sector of the economy are, however, masked. Thus this paper, using time-series data for the period 1970-2003 and adopting the ordinary least square technique, investigated the impacts of FDI flows on the outputs of some selected sectors in the Nigerian economy. The parsimonious form of analysis of general-to-specific was applied in the analysis of the model. The results shows that FDI flow was significant to sectoral growth of the mining and quarrying, and the transportation and communication sectors, but was not significant to the growth of the agriculture, forestry, and fishery sector.

Suggested Citation

  • Sunday Mauton A. Posu & O. Ismail Soile & A. O. B. Sangosanya & Sunday Mauton A. Posu, 2007. "Foreign direct investment and Nigeria’s economic growth : a sectoral analysis," Philippine Review of Economics, University of the Philippines School of Economics and Philippine Economic Society, vol. 44(2), pages 171-194, December.
  • Handle: RePEc:phs:prejrn:v:44:y:2007:i:2:p:171-194

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    foreign direct investment; sectoral growth; human capital; investment flows;

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General


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