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Impact of Foreign Direct Investment on Human Development Index in Nigeria

Author

Listed:
  • Gökmenoğlu, Korhan K.

    (Eastern Mediterranean University)

  • Apinran, Martins Olugbenga

    (Eastern Mediterranean University)

  • Taşpınar, Nigar

    (Eastern Mediterranean University)

Abstract

Economic growth is a necessary condition for human progress, but not sufficient in itself to guarantee it; therefore, other dimensions and determinants of human development must be investigated by researchers. This paper explores the impact of foreign direct investment (FDI) on the human development index (HDI) in Nigeria for the period of 1972–2013. Johansen cointegration test results reveal a long-term relationship between FDI and human development indices (e.g., school enrollment, life expectancy at birth, and gross national income). Toda-Yamamoto test results show long-run bidirectional causality between FDI and life expectancy at birth. There is also unidirectional causality from FDI to gross national income. These results indicate that FDI has a significant impact on the HDI in Nigeria during the sample period. The striking message our empirical findings conveys is that the effect of FDI on the HDI is a complicated issue, so to obtain optimum results policy-makers should be aware of and take into account the pros and cons of FDI inflows on several aspects of human development.

Suggested Citation

  • Gökmenoğlu, Korhan K. & Apinran, Martins Olugbenga & Taşpınar, Nigar, 2018. "Impact of Foreign Direct Investment on Human Development Index in Nigeria," Business and Economics Research Journal, Uludag University, Faculty of Economics and Administrative Sciences, vol. 9(1), pages 1-13, January.
    • Handle: RePEc:ris:buecrj:0309
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    Citations

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    Cited by:

    1. Sabyasachi Tripathi, 2021. "How does urbanization affect the human development index? A cross-country analysis," Asia-Pacific Journal of Regional Science, Springer, vol. 5(3), pages 1053-1080, October.
    2. Kabiru Kamalu & Wan Hakimah Binti Wan Ibrahim, 2023. "Conditional Effect of Environmental Degradation and Institutional Environment on Human Development in Developing Countries: Evidence from Method of the Moment-Quantile Regression with Fixed Effect," International Journal of Energy Economics and Policy, Econjournals, vol. 13(5), pages 667-677, September.
    3. Djokoto, Justice Gameli & Gidiglo, Ferguson K. & Srofenyo , Francis Y. & Agyeiwaa-Afrane, Akua, 2022. "Human Development Effects of Food Manufacturing Foreign Direct Investment," International Journal of Food and Agricultural Economics (IJFAEC), Alanya Alaaddin Keykubat University, Department of Economics and Finance, vol. 10(1), January.
    4. Courage Mlambo & Forget Kapingura, 2020. "Remittances and Economic Development: Evidence from SADC Countries?," Eurasian Journal of Economics and Finance, Eurasian Publications, vol. 8(4), pages 261-273.
    5. Zaijun Li & Xiang Zheng & Suleman Sarwar, 2022. "Spatial Measurements and Influencing Factors of Comprehensive Human Development in China," Sustainability, MDPI, vol. 14(9), pages 1-20, April.
    6. Ehouma Jacques Allou & Bosede Ngozi Adeleye & Jianhua Cheng & Rehman Abdul, 2020. "Is there a nexus between China outward foreign direct investment and welfare in Côte dʼIvoire? Empirical evidence from the Toda–Yamamoto procedure," African Development Review, African Development Bank, vol. 32(3), pages 499-510, September.
    7. Tudorache, Maria-Daniela, 2020. "Examining the Drivers of Human Development in European Union," EconStor Conference Papers 222443, ZBW - Leibniz Information Centre for Economics.
    8. Khemais Zaghdoudi, 2018. "Is the relationship between external debt and human development non-linear? A PSTR approach for developing countries," Economics Bulletin, AccessEcon, vol. 38(4), pages 2194-2216.

    More about this item

    Keywords

    Foreign direct investment; Human development index; Cointegration; Toda-Yamamoto; Nigeria;
    All these keywords.

    JEL classification:

    • C01 - Mathematical and Quantitative Methods - - General - - - Econometrics
    • F40 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - General
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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