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Capital Inflow and Industrial Performance in Nigeria: Including the Excluded

Author

Listed:
  • Ibrahim A. Adekunle

    (Olabisi Onabanjo University, Ago-Iwoye, Nigeria)

  • Ayomide O. Ogunade

    (Olabisi Onabanjo University, Ago-Iwoye, Nigeria)

  • Toluwanimi G. Kalejaiye

    (Ijagun, Ogun State, Nigeria)

  • Adewale M. Balogun

    (Olabisi Onabanjo University, Ago-Iwoye, Nigeria)

Abstract

Africa most populous black nations remain underdeveloped, mainly due to shambolic industrial sector performance. Rising problems of insecurity, corrupt practices, consumerism structure have made gains from capital inflows minimal. Little empirical credence has been leaned to the capital inflow-industrial output growth relationship in Nigeria. This anomaly has resulted in shortsighted policy formulation and attendant consequences. This paper examined international capital flows and industrial performance in Nigeria. The paper employed the two-step Engle and Granger estimation procedure and the Granger Causality to estimate parameters of the indices of industrial output growth and capital inflows to Nigeria. Findings revealed that labour participation, gross fixed capital formation, foreign direct investment (FDI) and portfolio investment have a significant positive relationship with industrial performance in Nigeria. Findings also revealed unidirectional causality from labour participation, gross fixed capital formation, foreign direct investment (FDI) and portfolio investment to industrial performance in Nigeria. Based on the findings, the Nigerian government should create an enabling environment to attract more capital inflow that could augment domestic resources with the sole aim of growing the industrial sector.

Suggested Citation

  • Ibrahim A. Adekunle & Ayomide O. Ogunade & Toluwanimi G. Kalejaiye & Adewale M. Balogun, 2020. "Capital Inflow and Industrial Performance in Nigeria: Including the Excluded," Research Africa Network Working Papers 20/021, Research Africa Network (RAN).
    • Handle: RePEc:abh:wpaper:20/021
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    References listed on IDEAS

    as
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    6. Oded, Galor, 2011. "Inequality, Human Capital Formation, and the Process of Development," Handbook of the Economics of Education, in: Erik Hanushek & Stephen Machin & Ludger Woessmann (ed.), Handbook of the Economics of Education, edition 1, volume 4, chapter 0, pages 441-493, Elsevier.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Ibrahim Ayoade Adekunle & Sheriffdeen Adewale Tella & Oluwaseyi Adedayo Adelowokan, 2021. "Macroeconomic policy volatility and household consumption in Africa," SN Business & Economics, Springer, vol. 1(3), pages 1-22, March.

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    More about this item

    Keywords

    Capital Inflow; Industrial Performance; Error Correction Modelling; Granger Causality; Nigeria;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • P47 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Performance and Prospects

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