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Foreign Capital Inflows and Economic Growth in Nigeria: Any Nexus?

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  • Kizito Uyi Ehigiamusoe
  • Hooi Hooi Lean

Abstract

This paper examines the impact of foreign capital inflows on economic growth in Nigeria for 1980–2015 period. It employs Autoregressive Distributed Lagged (ARDL)-bounds test, and finds a cointegration relationship between foreign capital inflows and growth. Specifically, foreign portfolio investment has positive impact on growth, while the impact of foreign loans is negative. Nevertheless, foreign direct investment and foreign aid have insignificant impact on growth, suggesting that Nigeria cannot rely on foreign direct investment and foreign aid as vehicles to stimulate growth. Rather, an increase in foreign portfolio investment or reduction in foreign loans has beneficial effects on the economy.

Suggested Citation

  • Kizito Uyi Ehigiamusoe & Hooi Hooi Lean, 2019. "Foreign Capital Inflows and Economic Growth in Nigeria: Any Nexus?," Journal of African Business, Taylor & Francis Journals, vol. 20(4), pages 455-471, October.
    • Handle: RePEc:taf:wjabxx:v:20:y:2019:i:4:p:455-471
    DOI: 10.1080/15228916.2019.1581010
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    Cited by:

    1. Fisayo Fagbemi & Tolulope T. Osinubi, 2020. "Leveraging Foreign Direct Investment for Sustainability: An Approach to Sustainable Human Development in Nigeria," Working Papers 20/090, European Xtramile Centre of African Studies (EXCAS).
    2. Friday Osemenshan Anetor & Olusegun Vincent, . "Do human capital and institutional environment constrain the impact of foreign direct investment inflows on economic growth in Africa?," UNCTAD Transnational Corporations Journal, United Nations Conference on Trade and Development.
    3. Fisayo Fagbemi & Geraldine E. Nzeribe & Tolulope T. Osinubi & Simplice A. Asongu, 2021. "Interconnections between Governance and Socioeconomic Conditions: Understanding Sub-Saharan African Challenges," Working Papers of the African Governance and Development Institute. 21/099, African Governance and Development Institute..
    4. Liu, Qiang & Sun, Hongyu & Luo, Haiming, 2022. "Resource-richness, technological innovation, and sustainable development: Evidence from emerging economies," Resources Policy, Elsevier, vol. 79(C).
    5. Fisayo Fagbemi & Tolulope Temilola Osinubi & Geraldine Ejiaka Nzeribe & Taofik Olatunji Bankole, 2022. "Human Capital Development Challenge: Why Corruption Eradication is a Panacea in Nigeria," Journal of Development Policy and Practice, , vol. 7(2), pages 180-205, July.
    6. Dervis Kirikkaleli & Ibrahim Adeshola & Tomiwa Sunday Adebayo & Abraham Ayobamiji Awosusi, 2021. "Do foreign aid triggers economic growth in Chad? A time series analysis," Future Business Journal, Springer, vol. 7(1), pages 1-17, December.

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