Factors determining FDI in Nigeria: an empirical investigation

Dinda, Soumyananda (2009): Factors determining FDI in Nigeria: an empirical investigation.

Abstract

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
• Language: English
• 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 ; Diffusion Processes ; State Space 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, Innovation, 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

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