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Foreign Direct Investment and Growth Nexus: Further Evidence from Africa’s Largest Economy

Author

Listed:
  • Anthony Orji
  • Godson Umunna Nwagu
  • Jonathan E. Ogbuabor
  • Onyinye I. Anthony-Orji

Abstract

The study investigated the effect of foreign direct investment (FDI) on economic growth in Nigeria, which is currently Africa’s largest economy, and also determined the long-run relationship between FDI and economic growth in Nigeria from 1981 to 2017. The study adopted the autoregressive distributed lag modelling approach and ordinary least square in the analysis. The empirical results revealed that FDI has a positive and significant relationship with economic growth in Nigeria within the period under review. The study concluded and recommended that Nigerian Government should formulate policies that will attract more FDI in all sectors of the economy especially in the service and manufacturing sectors, so as to improve the infrastructural facilities and production of goods in the country and also expand its labour force. Finally, there is need to improve the educational policy of the country in order to raise the stock of human capital in the country that will make useful policies for the attraction for productive FDIs in the country. JEL Classification : E22, F21, F23, F43

Suggested Citation

  • Anthony Orji & Godson Umunna Nwagu & Jonathan E. Ogbuabor & Onyinye I. Anthony-Orji, 2021. "Foreign Direct Investment and Growth Nexus: Further Evidence from Africa’s Largest Economy," Journal of Infrastructure Development, India Development Foundation, vol. 13(1), pages 65-78, June.
    • Handle: RePEc:sae:jouinf:v:13:y:2021:i:1:p:65-78
    DOI: 10.1177/09749306211024433
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    References listed on IDEAS

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    1. Grace Toyin Adigun & Abiola John Asaleye & Olayinka Omolara Adenikinju & Kehinde Damilola Ilesanmi & Sunday Festus Olasupo & Adedoyin Isola Lawal, 2025. "Remittances and FDI: Drivers of Employment in the Economic Community of West African States," JRFM, MDPI, vol. 18(8), pages 1-17, August.
    2. repec:bjc:journl:v:12:y:2025:i:8:p:513-526 is not listed on IDEAS
    3. Abdul-Salam, Yakubu, 2024. "Evaluating the impact of a 24-hour economy on Ghana's economic landscape: A computable general equilibrium approach," Socio-Economic Planning Sciences, Elsevier, vol. 95(C).
    4. Feihong Zheng & Yue Niu, 2023. "Environmental Decentralization, Resource Endowment and Urban Industrial Transformation and Upgrading: A Comparison of Resource-Based and Non-Resource-Based Cities in China," Sustainability, MDPI, vol. 15(13), pages 1-20, July.
    5. Verena Dominique Kouassi & Hongyi Xu & Chukwunonso Philip Bosah & Twum Edwin Ayimadu & Mbula Ngoy Nadege, 2024. "Sustainable Energy Usage for Africa: The Role of Foreign Direct Investment in Green Growth Practices to Mitigate CO 2 Emissions," Energies, MDPI, vol. 17(15), pages 1-23, August.
    6. Elias A. Udeaja & Nathan Audu, 2023. "Asymmetric Effect of External Debt and Foreign Capital Flows on Economic Growth: New Evidence from Nigeria," Athens Journal of Business & Economics, Athens Institute for Education and Research (ATINER), vol. 9(3), pages 345-368, July.
    7. Quaye, Enoch & Acquaye, Adolf & Yamoah, Fred & Ndiaye, Malick, 2023. "FDI interconnectedness and sustainable economic development: A linear and non-linear Granger causality assessment," Journal of Business Research, Elsevier, vol. 164(C).

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    Keywords

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    JEL classification:

    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies

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