Effect of Foreign Direct Investment on Economic Growth in Nigeria
European Business & Management
Volume 2, Issue 2, November 2016, Pages: 40-46
Received: Aug. 13, 2016; Accepted: Nov. 19, 2016; Published: Dec. 20, 2016
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Author
Emmanuel Isaac John, Department of Banking and Finance, Faculty of Management Sciences, Nnamdi Azikiwe University, Awka, Nigeria
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Abstract
There have been controversies regarding the effect of foreign direct investment on the growth of the host country’s economy. While some researchers suggest a positive effect, others found a negative effect. It is against this backdrop that this study examined the effect of foreign direct investment on economic growth in Nigeria. The study covered the period 1981 to 2015. The study used secondary data derived from the Central Bank of Nigeria statistical bulletin and publications of the National Bureau of Statistics. The study employed multiple regression technique and Gretl 1.9.8 econometric software was used for the analysis. The results showed that foreign direct investment has a positive and significant effect on gross domestic product. It was also found that exchange rate has a positive but not significant effect on gross domestic product. Thus, the study concluded that foreign direct investment has a positive effect on economic growth in Nigeria as opposed to the findings and belief of some researchers and other stakeholders that foreign direct investment has a negative effect on the growth of the economy. It was recommended that government should improve the state of infrastructures in the country in order to encourage meaningful investments in the economy. Also, the Central Bank of Nigeria should come-up with policies that will help to stabilize the Naira exchange rate vis-à-vis the major currencies of the world, like the United States Dollar. This will boost the investors’ confidence in the economy.
Keywords
Foreign Direct Investment, Exchange Rate, Economic Growth, Nigeria
To cite this article
Emmanuel Isaac John, Effect of Foreign Direct Investment on Economic Growth in Nigeria, European Business & Management. Vol. 2, No. 2, 2016, pp. 40-46. doi: 10.11648/j.ebm.20160202.14
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Copyright © 2016 Authors retain the copyright of this article.
This article is an open access article distributed under the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/) which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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