Investigating The Effects of Foreign Direct Investments and Remittances On Economic Growth in Nigeria: A Vector Autoregressive Approach PDF Download
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Author: Esther Oluwafunmilayo Adegbite
Publisher:
ISBN: 9781952751646
Category : Business & Economics
Languages : en
Pages : 42
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Book Description
In an attempt to ensure greater participation in the global economy, developing countries have increasingly liberalized, privatized and deregulated their economies since the mid-1980s. More welcoming policies to attract foreign capital inflows have been a prominent component of this trend. In this study, an attempt is made to analyze the impact of foreign direct investment and remittances inflow on economic growth of Nigeria in a quest to find a reasonable answer to the question of whether FDI and remittances inflows constitute vital sources of economic growth to Nigeria. The study employed the Vector Autoregressive (VAR) approach. It was established that foreign direct investment has a positive but non-significant impact on Nigeria's economic growth. However, it is evident from the outcome of the study that the remittances inflow has a negative though non-significant impact on Nigeria economic growth. The policy implication of this study is that government should build an investment-friendly environment free of insecurity and corruption, reduce the cost of doing business and put in place the mechanism to attract more capital inflows to boost domestic production. By doing this, Foreign investors will have confidence in Nigeria economy and commit more funds in form of Foreign Direct Investment in Nigeria which will enhance domestic production. Remittances inflow can then be channeled to consumption of these domestic goods and services rather than on imported goods. This will increase aggregate demand and ultimately affect output and growth in Nigeria.
Author: Esther Oluwafunmilayo Adegbite
Publisher:
ISBN: 9781952751646
Category : Business & Economics
Languages : en
Pages : 42
Get Book Here
Book Description
In an attempt to ensure greater participation in the global economy, developing countries have increasingly liberalized, privatized and deregulated their economies since the mid-1980s. More welcoming policies to attract foreign capital inflows have been a prominent component of this trend. In this study, an attempt is made to analyze the impact of foreign direct investment and remittances inflow on economic growth of Nigeria in a quest to find a reasonable answer to the question of whether FDI and remittances inflows constitute vital sources of economic growth to Nigeria. The study employed the Vector Autoregressive (VAR) approach. It was established that foreign direct investment has a positive but non-significant impact on Nigeria's economic growth. However, it is evident from the outcome of the study that the remittances inflow has a negative though non-significant impact on Nigeria economic growth. The policy implication of this study is that government should build an investment-friendly environment free of insecurity and corruption, reduce the cost of doing business and put in place the mechanism to attract more capital inflows to boost domestic production. By doing this, Foreign investors will have confidence in Nigeria economy and commit more funds in form of Foreign Direct Investment in Nigeria which will enhance domestic production. Remittances inflow can then be channeled to consumption of these domestic goods and services rather than on imported goods. This will increase aggregate demand and ultimately affect output and growth in Nigeria.
Author: Prince Eze Chidi Nwauba
Publisher: GRIN Verlag
ISBN: 3346229815
Category : Business & Economics
Languages : en
Pages : 100
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Book Description
Doctoral Thesis / Dissertation from the year 2016 in the subject Business economics - Investment and Finance, , course: Public Administration, language: English, abstract: The study examined foreign direct investment (FDI): a panacea to national economic development. The objectives set for the study are; to determine the causes of the Nigerian economic downturn, to ascertain the effects of foreign direct investment, to suggest measures that would be taken to accelerate the economic development of Nigeria. Primary and secondary data were used; the population of the study was 1200 from which the sample sizes of 400 were determined using Taro Yamani’s formula. The research instruments used were questionnaire and oral interview. The reliability of the research instruments was tested using Pearson Product moment correlation coefficient; the result gave a reliability index of 0.98 indicating a high degree of consistency. Chi-square and ANOVA approach were the statistical tools used. The findings from the study reveals that, decline in oil prices and revenue, increase government expenditure and decline in market indices are the challenges posed by economic downturn in Nigeria; consumption-based economy, poor savings, high credit culture and huge financial outflow are the causes of the economic crises in Nigeria; reduction in direct foreign investment and overseas development assistance are the effects of economic crisis to Nigeria and finally, diversification of the economy, robust regulatory policies and professional supervision to aid foreign direct investment in Nigeria. Based on the findings, the researcher made the following recommendation: Nigeria should adopt tough policy measures as effective strategies towards a comprehensive strengthening of the economy, government should ensure that policy recommendations are implemented in order to reposition the Nigerian economy against the impact of future economic downturn, government should create enabling environment to attract foreign investors in order to boost economic activities in the country. Finally, government needs to sincerely focus on developing/strengthening the economy and provide alternative sources of revenue on a sustained basis.
Author: Gashaw Atilaw
Publisher: GRIN Verlag
ISBN: 3346715051
Category : Business & Economics
Languages : en
Pages : 81
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Book Description
Master's Thesis from the year 2021 in the subject Economics - Economic Cycle and Growth, grade: 3.75 (good), Ethiopian Civil Service University, language: English, abstract: This paper is about the effect of international remittances of economic growth in sub-Saharan Africa. For many developing economies, remittances constitute the single largest source of foreign exchange, exceeding export revenues, foreign direct investment (FDI), and other private capital inflows. This study aims to examine the effect of international remittances on economic growth in SSA countries using a panel data approach. The System Generalized Method of Moments was used as the main model of analysis. The sample consists of 29 SSA countries for the period 2004-2019. The study findings show that international remittance has a positive and significant effect on economic growth in SSA. The study recommends that SSA countries should be designing policies and strategies that facilitate less costly and hassle-free flow of remittances into national development. There is a need to have well-established institutional frameworks to train, support, and ensure the welfare of emigrants abroad by the provision of information or services to assist migrant welfare and promote remittances and investment in the home country.
Author: Chinweobo Umeora
Publisher:
ISBN:
Category :
Languages : en
Pages : 14
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Book Description
Foreign Direct Investment (FDI) has been held to provide developing nations including Nigeria with much needed capital for economic growth. Part of the Foreign Direct Investment is the inflow of up to date technology and management skill. This paper investigates the effect of FDI on selected macro economic variables of GDP, inflation and Exchange Rate. It used Ordinary Least Squares (OLS) to examine the relationship between the Dependent variable (FDI) and the independent variables -Inflation and Exchange Rate. The study indicates that GDP, inflation and Exchange Rate are affected to the extent of 46.5% by FDI. FDI does not make the GDP to grow, increases inflation and has negative effect on exchange rate.Although the study contradicts a priori expectations and popular economic theory of capital, the inflow of FDI into the country is essential. The government should encourage it and pay attention as to its application.
Author: V. S. Kenny
Publisher:
ISBN:
Category :
Languages : en
Pages : 8
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Book Description
This study examined the influence of foreign direct investment and exchange rate on economic growth in Nigeria from 1971 to 2013. The study employed trend lines and percentage to analysis the influence of both FDI and exchange rate on the economic growth of the country. From the analysis, this study found that exchange rate exerts most influence on economic growth than FDI in Nigeria.
Author: Antoine Niyungeko
Publisher: GRIN Verlag
ISBN: 3346248224
Category : Business & Economics
Languages : en
Pages : 23
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Book Description
Scientific Study from the year 2020 in the subject Economics - International Economic Relations, , language: English, abstract: This study aims identifying the mediation effect of export in the relationship between FDI and GDP in low and middle low-income African countries. The study uses correlation analysis, Baron and Kenny method, Bootstrap procedure and Sobel test to investigate the significance of the indirect effect. The relationship between foreign direct investment (FDI) inflows, exports and economic growth as measured by gross domestic product (GDP) has been a global interest of academics and policy-makers, but research methods did not allow the characterization of the indirect mediating effects that exports have on that relationship. The result of the analysis shows a partial mediation of exports in the relationship between FDI and GDP. The study demonstrates the indirect effect caused by FDI through export. It is therefore recommended that low and middle low-income African countries should stimulate foreign direct investment to boost their exports, and gross domestic product. Additionally, these countries should find new ways of financing exports as FDI are predicted to fall due to the Covid-19 pandemic during 2020.
Author: Alobari Collins
Publisher:
ISBN:
Category :
Languages : en
Pages : 14
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Book Description
Research reports have shown that foreign direct investment impacts on the growth and economic development of especially the developing countries like Nigeria. But the discourse issue lies in the type of impact - negative or positive. In the bid to find the impacts of FDI on the nation's economic growth, researchers have reviewed many factors that influence FDI flow and therefore proffered solutions based on their findings. This research in literature review found that the relationship between exchange rate and FDI has been mostly ignored. And Nigeria being a developing economy in need of constant inflow of FDI is attracting little and having problem in retaining the ones attracted. Therefore the study investigates the impact of FDI on GDP, influence of exchange rate on FDI using a descriptive analysis of secondary data on exchange rate and FDI from the CBN Statistics data base. The findings of the study agrees with some other research report that Nigeria have so far attracted little of FDI and have lost much of the few it has attracted, yet there are good developmental resources to be desired which comes with FDI. The study also found a relationship between FDI, Exchange rate and Economic Growth in Nigeria and thus made recommendations for the domestic firms, government and other stakeholders.
Author: Ugwuegbe Ugochukwu
Publisher:
ISBN:
Category :
Languages : en
Pages : 10
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Book Description
This study investigates the empirical relationship between Foreign Direct Investment and economic growth in Nigeria. The work covered a period of 1981-2009 using an annual data from Central Bank of Nigeria statistical bulletin. A growth model via the Ordinary Least Square method was used to ascertain the relationship between FDI and economic growth in Nigeria. The study also added Gross Fixed Capital Formation with a view to capture the effect of domestic investment on the growth of the economy for the period under review. Interest Rate and exchange rate were also added as control variables in the model. Granger causality test was also employed to determine the direction of causality between FDI and economic growth in Nigeria. The result of the OLS techniques indicates that FDI has a positive and insignificant impact on the growth of Nigerian economy for the period under study. GFCF which was used as a proxy for domestic investment has a positive and significant impact on economic growth. Interest rate was found to be positive and insignificant while exchange rate positively and significantly affects the growth of Nigeria economy. Therefore, government should provide an enabling environment that will encourage foreign investors to invest in Nigeria economy by addressing the security challenges in the country, providing investment friendly environment by improved regulatory framework as well as encourage domestic investment.
Author: Innocent C. Ogbonna
Publisher:
ISBN:
Category :
Languages : en
Pages : 7
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Book Description
Developing countries, Nigeria inclusive, face a shortage of investible funds and hence strive to attract foreign direct investment (FDI) because of its acknowledged potentials as a tool of economic development. This study investigated the empirical relationship between FDI and economic growth in Nigeria. Secondary data sourced mainly from CBN publications were used in the OLS and granger causality regression equations conducted for the period 1986 to 2010. Although FDI coefficient in the regression result showed that about 13% of variations in GDP are accounted for by a percent increase in FDI, their relationship is statistically insignificant. The regression result also showed that other variables in the model - gross fixed capital formation (GFCF), net exports (NXP), consumer price index (CPI), and exchange rate (EXR) - impacted on the GDP. The result of the granger causality test showed a bi-directional causality between FDI and GDP, that is, each granger cause the other. On the basis of these, it was recommended that more sectors of the economy be deregulated so as to encourage more investor participation in the productive sector of the economy.
Author: Sunday Posu
Publisher:
ISBN:
Category :
Languages : en
Pages : 24
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Book Description
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.
