OKPARA, GODWIN CHIGOZIE (2012): On whether foreign direct investment catalyzes economic development in Nigeria.
This paper investigated the impact of Foreign Direct Investment on some selected macro-economic variables such as real GDP, gross fixed capital formation and unemployment. Data for the variables were sourced from the Central Bank of Nigeria’s Statistical Bulletin. For the assessment of this impact, the author used co-integration and error correction model to arrive at a parsimonious result which revealed that foreign direct investment though impacts positively and significantly on the gross fixed capital formation and the real GDP, has not made any positive and significant impact on the reduction of unemployment in Nigeria. The researcher therefore calls for putting in order the Country’s social, political and economic environment for foreign investment to yield dividends that will be enormous enough as to significantly reduce unemployment and engender instant growth on real GDP.
|Item Type:||MPRA Paper|
|Original Title:||On whether foreign direct investment catalyzes economic development in Nigeria.|
|English Title:||On whether foreign direct investment catalyzes economic development in Nigeria.|
|Keywords:||foreign direct investment, economic growth, unemployment rate, co-integration, vector error correction model|
|Subjects:||E - Macroeconomics and Monetary Economics > E2 - Macroeconomics: Consumption, Saving, Production, Employment, and Investment > E22 - Capital; Investment; Capacity
C - Mathematical and Quantitative Methods > C1 - Econometric and Statistical Methods and Methodology: General > C12 - Hypothesis Testing: General
C - Mathematical and Quantitative Methods > C8 - Data Collection and Data Estimation Methodology; Computer Programs > C87 - Econometric Software
B - History of Economic Thought, Methodology, and Heterodox Approaches > B2 - History of Economic Thought since 1925 > B22 - Macroeconomics
C - Mathematical and Quantitative Methods > C3 - Multiple or Simultaneous Equation Models; Multiple Variables > C32 - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models
C - Mathematical and Quantitative Methods > C1 - Econometric and Statistical Methods and Methodology: General > C13 - Estimation: General
J - Labor and Demographic Economics > J2 - Demand and Supply of Labor > J21 - Labor Force and Employment, Size, and Structure
F - International Economics > F2 - International Factor Movements and International Business > F21 - International Investment; Long-Term Capital Movements
C - Mathematical and Quantitative Methods > C2 - Single Equation Models; Single Variables > C22 - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models
C - Mathematical and Quantitative Methods > C0 - General > C01 - Econometrics
|Depositing User:||Godwin Chigozie Okpara|
|Date Deposited:||01. Feb 2012 07:25|
|Last Modified:||11. Feb 2013 12:28|
Abajemito, J.O, Bamdele, A. Enendu, C.I. and Abdulahi. (2004),“Financing Investment for Growth: The Nigerian Experience.In Finance Investment and Growth in Nigeria”, A Central Bank of Nigeria Publication.
Aitken, B., A.E. Harrison and R. Lipsey. (1999), “Do domestic firms benefit from foreign direct investment?” American economic review,89: 605 – 18.
Akinkugbe, O. (2003), “Flow of foreign direct investment to Hitherto Neglected developing countries”, WIDER discussion paper No. 2003/02, Helsinki: UNU – WIDER.
Akinlo, A.E. (2004), “Foreign direct investment and growth in Nigeria: An empirical investigation”, journal of policy modeling, 26: 627 – 39.
Alaba, O. (2003), “Exchange rate volatility and foreign direct investment in Nigeria”, A Paper predxsented at the WIDER conference on sharing global prosperity, Helsinki, Finland, 6 – 7, September.
Alfaro, L., C. Arendam, K.O. Sebrem, S. Selin (2006), “How does foreign direct investment promote economic growth?” exploring the effects of financial markets on linkages. NBER working paper No. 12522.
Aluko, S.A. (1961), “Financing economic development in Nigeria”, The Nigerian journal of economic and social studies, 3(1): 39 – 67.
Amess, K., Roberts, B.M. (2006), “Post – transition – foreign direct investment – state ownership – industry concentration”, economic change and restructure, vol: 138, No: 3-4, pp: 211-225.
Ariyo, A. (1998). “Investment and Nigeria’s economic growth”, In investment in the growth process proceedings of Nigerian economic society annual conference 1998, pp. 389 – 415. Ibadan, Nigeria.
Auty,R.M(1998), “Resource Abundance And Economic Development: Improving the Performance in Resource Rich Countries”. Helsinki: The United Nations. University/World Institute for Development Research.
Ayanwale, A.B. (2007), “FDI and economic growth: evidence from Nigeria”, AERC research paper 165. African economic research consortium, Nairobi.
Ayanwale, A.B. and Bamire, A.S. (2001), “The influence of FDI on firm level productivity of Nigeria’s Agro/Agro – Allied sector”, Final report presented to the African economic research consortium, Nairobi.
Balasubramanyam, V.N., Salism, M. and Sapsfold, D. (1999), “foreign direct investment as an engine of growth”, Journal of international trade and economic development 8(1) 27 – 40.
Blomstrom, M., R. Lipsey and M. Zegan. (1994), “How does foreign investment affect economic growth?” journal of international economics, 45(1): 115 – 35.
Borensztein, E., J. De Gregorio, J.D. Lee, and J. W. Lee (1995), “How does foreign direct investment affect economic”, 58(1-2) 261-300.
Bourlakis, A.C. (1987), “Multinational corporations and domestic market structure: The case of Greek manufacturing industries”, Review of world economics, vol: 123, No: 4, pp: 719 – 733.
Brown, C.V. (1962), “External economies and economic development”, The Nigerian journal of economic and social studies, 4(1): 16 – 22.
Calvo, G.A. and Reinhart, C.M. (1998), “The consequences and management of capital inflows: Lessons for sub-Saharan Africa”, Expert group on development issues, internet.
Calvo, G.A., Leiderman, L. and Reinhart, C.M. (1993), “Capital flows and real exchange appreciation in Latin America: The role of external factors”, IMF staff papers, vol. 40, No.1, Washington, DC.
Chakrabati, A. (2001), “The determinants of foreign direct investment: sensitivity analyses of cross – country regressions”, Kyklos, vol. 54, No.1, 89 – 114.
Chenery, H.B. and Watanabe, T. (1958), “International comparisons of the structure of production”, Econometrica xxvi 487 – 521.
Chenery, H.B., Robinson, S. and Syrquin, M. (1986), “Industrialization and growth: A comparative study”. Washington, D.C.: The world Bank.
Cobham, A. 2001. “Capital account liberalisaiton and impact on the poor”, Paper produced for Oxfam and Bretton woods project.
De Gregorio, Jose. (2003), “The role of foreign direct investment and natural resources in economic development”, Working paper No. 196. Central Bank of Chile, Santiago.
Drabek, Z. and Payne, W. (1999), “The impact of transparency on foreign direct investment”, Staff working paper ERAD – 99 – 02. Geneva: World trade organization.
Driffield, N. (2001), “The impact of domestic productivity of inward investment in the UK”. The Manchester school, 69: 103 – 19.
Durham, J.B. (2004), “Absorptive capacity and the effects of foreign direct investment and equity foreign portfolio investment on economic growth”. European economic review, 48(2): 285 – 306.
Elmas, F., Degirmen, S. (2009), “Foreign direct investment and industrial concentration in the Turkish manufacturing system”, international research journal of finance and economic vol: 23, pp: 246-252.
Endozie, E.G. (1968), “Linkages, direct foreign investment and Nigeria’s economic development”, The Nigerian journal of economic and social studies, 10(2): 119 – 203.
Fernandez – Arias, E. (1994), “The new wave of private inflows: Push or Pull?” The journal of development economics, vol. 48, 383 – 418.
Georgion, G.C., Weinhold, S. (1992), “Japanese direct investment in the US”, World Economy, vol: 15, No.6, pp: 761 – 778.
Glass, A.J. and Saggi, S. (1998), “FDI policies under shared markets”, Journal of international economics, 49: 309 – 32.httpwww.nigeriaerbassy.in/index.
Hirschman, A.O. (1978), “Beyond Asymmetry: critical notes on myself as a young man and on some other old friends”, international organization, vol: 32, No.1, pp. 45-50.
Hymer, S.H. (1976), “The theory of international operations of national firms, part 1” the international operation of national firms: A study of direct foreign investment, Cambridge, MIT press.
Ibeanu, O(2001), “Environment, Human Security and Governance in Nigeria”, IHDP News Letter No. 3 article 4.
Kaufmann, D. and Wei, S. (1999), “Does ‘Grease Money’ speed up the wheels of commerce?”, policy research working paper 2254. Washington, D.C.: World Bank.
Lall, S. (1979), “Multinational and market structure in an open economy. The case of Malaysia”, Weltwirtcshafiliches, vol: 115, No.2, pp: 325-350.
Lall, S.and Streeten, P. (1977), “Foreign investment, Transitional and Developing Countries”, Macmillian, UK.
Lenin, V.I. (9977), Imperialism: The Highest stage of capitalism, New York, international publishers.
Markusen, J.R., Venables A.J. (1997), “Foreign direct investment as a catalyst for industrial development”, NBER working paper, No. 5696.
Mbutor. O. Mbutor (2011), “The Impact of Foreign Direct Investment on the Development of the Nigeria Economy”, A Seminar Paper presented to the Department of Economics, Abia State University Uturu.
Mod, A., Peria. M. (2007), “How foreign participation and market concentration impact bank spreads: evidence from Latin America”, Foreign direct investment and the World economy, Routledge publishing company, USA.
Moosa, I. (2002), Foreign dreict investment: Theory, evidence and practice, Palgrave Macmillan, UAS.
Moran, T.H. (1978), “Multinational cooperation’s and dependency: A Dialogue for Dependentistas and non-dependentistas”, international organization, vol: 32, No.1, pp:79 – 100.
Morisset, J. (2000), “Foreign direct investment in Africa: policies also matter”, World Bank working paper, No. 2481, Washington, D.C., USA.
Ndebbio, J.E.U. and Ekpo, A.H. (eds) (1994), The Nigerian economy at the Crossroads: policies and their effectiveness. Calaber: University of Calabar Press.
Newfarmer, R.S., Mueller, W.F. (1975), “Multinational corporations in Brazil and Mexico: structural sources of economic and non-economic market power”, report to the subcommittee on multinational corporations of the committee on foreign relations, US Senate, USA.
Obinna, O.E. (1983), “Diversification of Nigeria’s external finances through strategic foreign direct investment”, Nigerian economics society annual conference proceeding, Jos, 13 – 16th May.
OECD (1996), OECD Benchmark definition of foreign direct investment: third edition, Paris.
Ogbokor, A.C. (2005), “Macroeconomic impact of trade on Namibian growth: An empirical illustration.” Journal of social sciences 1(1) 57 – 60.
Okonkwo I.C.(2006), Multinational Corporations and Economic Development/Underdevelopment. Economic and Management Lagos: Don Vinton Publishers Ltd.
Oseghale, B.D. and Amonkhienan, E.E. (1987), “Foreign debt, oil export, direct foreign investment (1960 – 1984)’. The Nigerian journal of economic and social studies, 29(3): 359 – 80.
Otepola, T.A. (2005), “Foreign direct investment as a factor of economic growth in Nigeria”, Africa institute for economic development and planning (IDEP), Dakar, Seregal. Okpara, G.C. (2010), “Investigation of the critical sources of investment finance in Nigeria: A factor analytical approach”, American journal of scientific and industrial research vol. 1(3): 643 – 650.
Petrochilos, G.A. (1989), “Foreign direct investment and the development process, Gower Publishing Company, England.
Reuber, G., Crokell, H., Emersen, M. and Gallais-hamonno, G. (1973), Private foreign investment in development, Clarendon press and OECD, Oxford.
Santos, T.D. (1970), “The structure of depdence”, American economic review, May, pp: 231 – 239.
Shatz, H.J. (2001), “Expanding foreign direct investment in the Andean countries”, CID working paper No.64, Harvard, USA. March.
Smarzynska, B.K. (2002), “Does foreign direct investment increase the productivity of domestic firms?: in search of spillovers through backward linkages”. Policy research working paper No.29. The World Bank, Washington, D.C.
Smarzynska, B.K. and Wei, S. (2000), “Corruption and composition of foreign direct investment: Firm–level evidence”, policy research working paper 2360. Washington, D.C.: World bank.
Udeaja, Udoh E, Ebong. F.S (2008), “Do determinants of Foreign Direct Investment in Nigeria Differ Across Sectors? An Empirical Assessment”, Economic and Financial Review of Central Bank of Nigeria vol.46(2)
UI Haque, N., Mathieson, D. and Sharma, S. (1997), “Causes of capital inflows and policy responses to them”, finance and development, vol. 34, No.1.
Wei, S. (1999), “Does corruption relieve foreign investors of the burden of taxes and capital controls.” Policy research working paper No. 2209. Washington, D.C.: World bank.
Willkins, M. (1974), “International Business in perspective”, The maturing of multinational enterprise: American business abroad from 1914 to 1970, Cambridge, MIT Press.