EMPIRICAL INVESTIGATION OF DETERMINANTS OF FOREIGN PRIVATE INVESTMENT IN NIGERIA

OKORIE, George Chisom and Nwanji, Micheal Okolie (2018) EMPIRICAL INVESTIGATION OF DETERMINANTS OF FOREIGN PRIVATE INVESTMENT IN NIGERIA. GOUni Journal of Management and Social Sciences, 6 (2). pp. 36-47. ISSN 2550-7265

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Abstract

This study empirically examined the Determinants of Foreign Private Investment (FF1) in Nigeria within 1980 to 2014. The study made use of secondary data sourced from CBN Statistical Bulletin various years. The Error Correction Model was adopted following the stationarity status of the data set. From results, it was observed that Gross Domestic Product (GDP) and Openness (OPNS) were the only sign /I cant determinants of Foreign Private Investment in Nigeria within the period under review at 5% level of significance. The economic implication of this result is that GD]’ which measures the market size of the Nigerian economy in this study was a significant determinant of FPL Furthermore, OPNS which measures the degree of. openness of the Nigerian economy in this study was also a significant determinant of FF1. Therefore, this. result suggests that FF1 inflow flourishes in countries with liberal trade policies. Political Instability (P1) which was a dummy variable showed that there was no significant difference in the inflow of FPI between the military regime and the civilian regime. The result further indicated that coefficients of GD]’ and OPNS were significantly positive, indicating that there exists a positive and direct relationship between FF1 and GD]’, FPI and OPNS. The implication of the result is that when GDP and OPNS increase in Nigeria, FPI increases. The error correction mechanism indicated that the model has an adjustment speed of approximately 52% if there was disequilibrium in the short run. The result also showed that bi causality relationship exists between FPI and GDP, and between FF1 and OPNS. The implication is that both FF1 and GDP cause each other so also is with FF1 and OFNS. In the light of these findings, this study recommends that government should pursue economic policies which include addressing socioeconomic and infrastructural challenges in Nigeria so as to attract FPI inflows in Nigeria. That government should review her commercial and trade policies like the custom regulations, and make them friendly so as to attract FF1 inflows in Nigeria. That government should address the issues of low wage rates so as to boost domestic consumption and improve aggregate demand in Nigeria.

Item Type: Article
Subjects: H Social Sciences > HC Economic History and Conditions
Divisions: Faculty of Management and Social Sciences
Depositing User: mrs chioma hannah
Date Deposited: 19 Feb 2020 09:30
Last Modified: 19 Feb 2020 09:30
URI: http://eprints.gouni.edu.ng/id/eprint/2536

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