Dinda, Soumyananda (2009): Factors determining FDI in Nigeria: an empirical investigation.
Download (195Kb) | Preview
This paper investigates the recent surge of FDI in Nigeria, which is poor in terms of income but rich in natural resources. This study examines empirically whether FDI is resource seeking in Nigeria and its determining factors. Applying time series technique this paper observes that FDI flow to Nigeria is resource-seeking FDI during 1970-2006. In long run, the natural resource outflow, market size and openness have direct impact on FDI inflow while risk factors like inflation rate and foreign exchange rate have indirect effect. Finding in long run supports the literature. The contribution of this paper is the short run dynamics among major macroeconomic variables and direction of their causal linkage. It should be helpful for policy makers and macroeconomics managers for managing the nation
|Item Type:||MPRA Paper|
|Original Title:||Factors determining FDI in Nigeria: an empirical investigation|
|English Title:||Factors Determining FDI in Nigeria: An Empirical Investigation|
|Keywords:||FDI, Natural resource export, exchange rate, openness, inflation rate, VECM|
|Subjects:||C - Mathematical and Quantitative Methods > C1 - Econometric and Statistical Methods and Methodology: General > C13 - Estimation: General
C - Mathematical and Quantitative Methods > C3 - Multiple or Simultaneous Equation Models; Multiple Variables > C32 - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models
Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q3 - Nonrenewable Resources and Conservation > Q32 - Exhaustible Resources and Economic Development
O - Economic Development, Technological Change, and Growth > O5 - Economywide Country Studies > O55 - Africa
F - International Economics > F1 - Trade > F13 - Trade Policy; International Trade Organizations
F - International Economics > F2 - International Factor Movements and International Business > F21 - International Investment; Long-Term Capital Movements
N - Economic History > N1 - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations > N17 - Africa; Oceania
F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F43 - Economic Growth of Open Economies
|Depositing User:||Soumyananda Dinda|
|Date Deposited:||20. Jul 2012 03:40|
|Last Modified:||12. Feb 2013 08:41|
Asiedu, E. 2006. “Foreign Direct Investment in Africa: The Role of Natural Resources, Market Size, Government Policy, Institutions and Political Instability.” United Nations University.
Asiedu, E. 2002. “On the Determinants of Foreign Direct Investment to Developing Countries: Is Africa Different?” World Development, Vol.-30(1): 107-119.
Banerjee, A., J. W. Galbraith, and D. F. Hendry. 1993. Co-integration, Error correction and the econometric analysis of non-stationary data, New York, Oxford University Press.
Chakrabarti, A. 2001. “The determinants of foreign direct investment: Sensitivity analyses of cross-country regressions.” Kyklos 54: 89-112.
Chakraborty, C. and P. Basu. 2002. “Foreign Direct Investment and Growth in India: A Co-integration Approach, Applied Economics.” 34(9): 1061-1073.
Enders, W. 2004. Applied Econometric Time Series, 2nd ed. New Jersey; John Wiley and Sons.
Engle, R. F. and C. W. J. Granger. 1987. “Cointegration and Error Correction, Representation, Estimation and Testing” Econometrica: 251-276.
Engle, R. F. and B. S. Yoo. 1991. “Cointegrated Economic Time Series: An Overview with New Results.” in Engle, R.F. and Granger, C. W. J. (eds) Long-Run Economic Relationships. Oxford, Oxford University Press.
Gastanaga, V. M. and J.B. Nugent, B. Pashamova. 1998. “Host Country Reforms and FDI Inflows: How Much Difference do they Make?” World Development, Vol.-26 (7): 1299-1314.
Harris, R. and R. Sollis. 2003. Applied Time Series Modelling and Forecasting, West Sussex, Wiley.
Hines, J. R. Jr. 1997. “Altered states : Taxes and the location of foreign direct investment in America.” American Economic Review, 86(5): 1076 – 1094.
Iyoha, M. A. 2001. “An econometric study of the main determinants of foreign investment in Nigeria.” The Nigerian Economic and Financial Review, 6(2): December.
Johansen, S. and K. Juselius. 1990. “Maximum Likelihood estimation and inference on cointegration – with applications to the demand for money.” Oxford Bulletin of Economics and Statistics, 52 (2): 169-210.
Johansen, S. 1988. “Statistical analysis of cointegrating vectors.” Journal of Economic Dynamics and Control, 12: 231-254.
Ngowi, H. P. 2001. “Can Africa increase its Global share of foreign direct investment (FDI)?” West Africa Review, 2(2).
Obadan, M.I. 1982. “Direct Foreign Investment in Nigeria: An Empirical Analysis.” African Studies Review, XXV (1): March.
Pesaran, H. M. and Y. Shin. 1995. “Autoregressive Distributed Lag Modelling Approach to Cointegration Analysis.” DAE working paper series 9514. Department of Applied Economics, University of Cambridge.
Pesaran, H. M., Y. Shin, and R. Smith. 1996. “Testing the existence of a long-run relationship.” DAE working paper series 9622. Department of Applied Economics, University of Cambridge.
Pesaran, H. M. and R. Smith. 1998. “Structural Analysis of Cointegration VARS.” Journal of Economic Surveys, 12 (5): 471-505.
Pesaran, H. M., Y. Shin, and R. Smith. 2001. “Bounds Testing Approaches to the analysis of level relationships.” Journal of Applied Econometrics, vol.-16: 289-326.
Phillips, P.C.B. and P. Perron. 1988. “Testing for a Unit in Time Series Regression.” Biometrika, 75: 335-346.
Quintos, Carmela, E. 1998. “Stability Tests in Error Correction Models.” Journal of Econometrics, vol-82(2): 289-315.
Toda, H. Y. and Y. Taku. 1995. “Statistical inference in Vector Autoregressions with possibility integrated process.” Journal of Econometrics, vol.-66 (1-2): 225 -250.
Tsai, P. 1994. “Determinants of Foreign Direct Investment and its Impact on Economic Growth.” Journal of Economic Development, 19: 137-163.
UNCTAD. 2007. World Investment Report. United Nations, New York.
UNCTAD. 2007. Handbook of Statistics. on-line (http://www.unctad.org).
Wheeler, D. and A. Mody. 1992. “International investment location decisions: The case of U.S. firms.” Journal of International Economics, v33: 57-76.
World Bank. 2008. World Development Report. Oxford University Press.