Authors : H.A. Adefeso and A.A. Agboola
Abstract: This study set out to investigate empirically the long run determinants of foreign direct investment inflow in Nigeria using Residual-Based Engle-Granger-Dickey-Fuller cointegration test. The source of the data was mainly CBN Statistical Bulletin and Nigerian Development Index. The time series properties of the variable were investigated by conducting a unit root test using annual series data for the period 1970-2009 and found that variables employed were I(1) series with I(0) residual. The result revealed that 1% change in degree of openness, market size, ICT, oil sector, tax, tourism and mobile phone penetration component will determine a 15, 67, 11, 79, 48, 38 and 34% change in the mean of inflows of FDI, respectively in the long run. Also, 1% change in infrastructure, CPI, exchange rate and external debt will account for 628, 50, 163 and 309% change in the mean of outflows of FDI, respectively in the long run over the period of study. The implication from above is that the positive role played by natural resource-seeking FDI suggests that Nigerian government should not only increase its budget on the maintenance of these resources but also ensure conducive investment environment through political and social stability as oil sector and tourism alone are statistical significantly attracts 79 and 38% of the total FDI inflows respectively in Nigeria.
H.A. Adefeso and A.A. Agboola, 2012. Determinants of Foreign Direct Investment Inflows in Nigeria: An Empirical Investigation. The Social Sciences, 7: 457-463.