EFFECT OF FOREIGN DIRECT INVESTMENT ON ECONOMIC GROWTH IN NIGERIA: 1981 – 2016
- Project Research
- 1-5 Chapters
- Abstract : Available
- Table of Content: Available
- Reference Style: APA
- Recommended for : Student Researchers
- NGN 3000
Abstract
The inflow of foreign direct investment (FDI) to developing countries has continued to be on the increase over the years. This study investigates the effects of FDI on economic growth in Nigeria between 1981 and 2016. Structural macroeconometric models consisting of 4 blocks made up of aggregate production, aggregate demand and policy management, monetary and prices and external sector blocks were developed for the purpose of the study. The models have 19 simultaneous equations and 45 variables to capture the required proxies. Three-stage least squares (3SLS) technique was adopted to estimate the macroeconometric system of 19 simultaneous equations to capture the disaggregated effect of FDI on the different sectors of the economy as well as the inter-linkages amongst the sectors in order to give better insight into the variations inherent therein. FDI has positive sectoral effect on output of the productive sectors like agriculture, wholesale and retail services, industries, building and construction and gross fixed capital formation according to the findings of the study. Specifically, the simulation experiment considered four policy scenarios: the implications of 10%, 15%, 20% and 25% increases in the flow of FDI into the Nigerian economy. The simulation experiment on aggregate basis confirms FDI to be a great tool in growing the Nigerian economy. For example except for industry, building and construction the effect of FDI on these sectors is positive and significant. In addition, the aggregate demand and policy management block, except for government final consumption expenditure and private consumption expenditure, the performance of FDI is positive and significant. Again, considering the monetary and prices block, FDI has positive and significant effects on all the variables in the block. External sector block also showed similar results, suggesting that FDI has positive and significant effects on exports, exports of oil and gas and gross domestic product, while the effect on imports is negative, which is in accordance with a priori expectation. The finding shows that FDI has a significant effect on both sectoral and aggregate output of the economy but that the growth effects of FDI differ across sectors. The major recommendation of the study is that government should provide enabling environment in such a way that the flow of FDI would be geared towards financing capital projects such as road networks, railway lines, construction of new power plants and as a matter of urgency provide favourable policy in the area of exchange rate volatility, insecurity and corruption for easy inflow of FDI to the aggregate production sector specifically encouraging agricultural value chain and solid mineral development. This is because the country possesses highest comparative advantage in this sector, which would help relax the unemployment and foreign exchange bottle neck thereby making the economy to grow.
Related Project Materials
KNOWLEDGE PRACTICE OF CONTRACEPTIVES AMONG FEMALE STUDENTS
ABSTRACT
Access to contraceptive has become increasingly crucial for adolescents because many are sexua...
THE ROLE OF PLANNING AND FORECASTING IN BUSINESS ORGANIZATION (A CASE STUDY OF EASTERN SHOP NIGERIA LIMITED OGUI ENUGU, ENUGU STATE)
ABSTRACT
The role of planning and forecasting the business organization is a topic chosen from the business administrati...
AN EVALUATION OF INDEPENDENT NATIONAL ELECTORAL COMMISSION (INEC AND IT’S ROLE IN GENERAL ELECTION)
Abstract
This study evaluate the role of Independent National Electoral Commission (INEC) in general elections in Niger...
HUMAN RESOURCE MANAGEMENT PRACTICES AND ITS EFFECTS ON THE CORPORATE PERFORMANCE OF GLAXOSMITHKLINE, OGUN STATE, NIGERIA
BACKGROUND OF THE STUDY
Organizations in today's world are continuously under pressure to enhance s...
ANALYSIS OF FINANCIAL STATEMENTS IN PERFORMANCE ASSESSMENT OF SELECTED BANKS IN NIGERIA
ABSTRACT
This study investigates the relationship between financial statements and bank performance in Nigeria- A case study of zenith ba...
THE ACCURACY OF MORTGAGE VALUATION AS A LENDING REQUIREMENT FOR SELECTED BANKS IN KADUNA METROPOLIS
Background of the study
Landed property is frequently a significant percentage of a company'...
CLASS SIZE AND TEACHER’S EFFECTIVENESS IN SECONDARY SCHOOLS
BACKGROUND TO THE STUDY
For many years, educators, politicians and people in general have debated...
INTELLIGENCE GATHERING ON KIDNAPPING INCIDENCE USING GEOSPATIAL TECHNOLOGIES
ABSTRACT
Of late, Nigeria has been posed to all forms of insecurities which threatens the existence of the entire nation. Of the several...
IMPACT OF EMERGING TECHNOLOGY IN THE EDUCATIONAL SECTOR OF NIGERIA
ABSTRACT
The study focused attention on the impact of emerging technology in the educational system. Major emerging tech...
AN ASSESSMENT OF KNOWLEDGE, ATTITUDE AND PRACTICE OF EXCLUSIVE BREASTFEEDING AMONG WOMEN
ABSTRACT
Inappropriate feeding practices can have profound consequences on the growth, development and survival of infants. The World Hea...
