This study empirically examined impact of foreign
direct investment on economic growth of Nigeria between 1981 and 2017. Auto
Regressive Distributed Lag (ARDL) model and Bounds Test were adopted as the
estimating techniques to verify the existence of long-run relationship between foreign
direct investment and economic growth in Nigeria. Real gross domestic product
was used as the dependent variable, while foreign direct investment, balance of
trade and exchange rate were used as the explanatory or independent variables.
Data used were extracted from the Central Bank of Nigeria statistical bulletin
of 2018. The empirical results of Auto Regressive Distributed Lag (ARDL) model
showed that all the variables except exchange rate had positive and significant
impact on real gross domestic product. Exchange rate had a negative and
insignificant impact on real gross domestic product. The government should
create an enabling environment which would attract foreign investors into
Nigeria, such as good, transparent and fair tax system, promotion of economic
stability and the attainment of key macro-economic objectives. This is because
foreign direct investment inflow has a significant impact on economic growth of
Nigeria. Similarly, government should encourage and support local producers to
produce standard products and services for local demands and exportation which
will place Nigeria in a favourable balance of trade. This is as a result of
balance of trade positive and significant impact on the economic growth of
Nigeria. Mostly, government should bring out policies that will curb the
importation of excess goods and services into Nigeria. This is attributed to
the negative and insignificant impact of exchange rate on the economic growth
of Nigeria. The higher the exchange rate of naira to dollar, the lower the
economic growth of Nigeria.
HANSON, H (2022). Impact Of Foreign Direct Investment On Eonomic Growth Of Nigeria. Repository.mouau.edu.ng: Retrieved Feb 23, 2024, from https://repository.mouau.edu.ng/work/view/impact-of-foreign-direct-investment-on-eonomic-growth-of-nigeria-7-2
HANSON, HANSON. "Impact Of Foreign Direct Investment On Eonomic Growth Of Nigeria" Repository.mouau.edu.ng. Repository.mouau.edu.ng, 14 Nov. 2022, https://repository.mouau.edu.ng/work/view/impact-of-foreign-direct-investment-on-eonomic-growth-of-nigeria-7-2. Accessed 23 Feb. 2024.
HANSON, HANSON. "Impact Of Foreign Direct Investment On Eonomic Growth Of Nigeria". Repository.mouau.edu.ng, Repository.mouau.edu.ng, 14 Nov. 2022. Web. 23 Feb. 2024. < https://repository.mouau.edu.ng/work/view/impact-of-foreign-direct-investment-on-eonomic-growth-of-nigeria-7-2 >.
HANSON, HANSON. "Impact Of Foreign Direct Investment On Eonomic Growth Of Nigeria" Repository.mouau.edu.ng (2022). Accessed 23 Feb. 2024. https://repository.mouau.edu.ng/work/view/impact-of-foreign-direct-investment-on-eonomic-growth-of-nigeria-7-2