Determinants of Foreign Direct Investment Inflows in Nigeria: An Empirical Analysis (1970-2011)

13 Pages Posted: 31 Mar 2016

See all articles by Emeka Okereke

Emeka Okereke

University of Port Harcourt, Port Harcourt, Nigeria

Nelson Ebulison

University of Port Harcourt

Date Written: March 31, 2016

Abstract

The study empirically identified the determinants of Foreign Direct Investment (FDI) inflow to Nigeria. Secondary sources were used to source annual time series data on FDI inflow into Nigeria, Degree of trade openness, Gross Domestic Product (GDP), Interest rate, Exchange rate of the naira against the US Dollar (N/$),over the period, 1970-2011. These variables were analyzed using Ordinary least Square (OLS), Unit Root test, Co-integration and Error Correction Mechanism (ECM). It was found that there is a significant relationship between FDI and GDP, exchange rate and degree of openness but no significant relationship between FDI and interest rate in Nigeria. The study recommends among others, that Government should continuously formulate and implement policies that would increase productive base, embark on moderate devaluation of the national currency to attract more FDI inflow into Nigeria and encourage liberalization with some policy caution.

Keywords: Degree of Openness, Foreign Direct investment, Devaluation and Exchange Rate

Suggested Citation

Okereke, Emeka and Ebulison, Nelson, Determinants of Foreign Direct Investment Inflows in Nigeria: An Empirical Analysis (1970-2011) (March 31, 2016). Available at SSRN: https://ssrn.com/abstract=2756975 or http://dx.doi.org/10.2139/ssrn.2756975

Emeka Okereke (Contact Author)

University of Port Harcourt, Port Harcourt, Nigeria ( email )

East/West Road
P.M.B 5323, Choba
Port Harcourt, Rivers State 500102
Nigeria

Nelson Ebulison

University of Port Harcourt ( email )

East/West Road
P.M.B 5323, Choba
Port Harcourt, Rivers State 500001
Nigeria

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