Impact of Fdi on Nigerian Economy
FDI and Economic Growth:
Evidence from Nigeria
By
Adeolu B. Ayanwale
Department of Agricultural Economics
Obafemi Awolowo University
Ole-Ife, Nigeria
AERC Research Paper 165
African Economic Research Consortium, Nairobi
April 2007
THIS RESEARCH STUDY was supported by a grant from the African Economic
Research Consortium. The findings, opinions and recommendations are those of the author, however, and do not necessarily reflect the views of the Consortium, its individual members or the AERC Secretariat.
Published by: The African Economic Research Consortium
P.O. Box 62882 - City Square
Nairobi 00200, Kenya
Printed by: Modern Lithographic (K) Ltd.
P.O. Box 52810-City Square
Nairobi 00200, Kenya
ISBN 9966-778-09-8
©
2007, African Economic Research Consortium.
Contents
List of tables
List of figures
Abstract
Acknowledgements
1. Introduction 1
2. Literature review 3
3. Some stylized facts about FDI in Nigeria 9
4. Theoretical framework 17
5. Methodology and analytical framework 19
6. Results and discussion 25
7. Summary and conclusion 35
References 37
List of tables
1. Nigeria: Net foreign direct investment inflow (US$ million) 9
2. Nigeria: Foreign direct investment, 1970–2002 10
3. Sectoral composition of FDI in Nigeria, 1970–2001 percentage 12
4. Basic statistics on FDI in Nigeria, 1970–2002 13
5. Summary statistics of included variables 21
6. Nigeria unit root tests for stationarity, 1970–2002 24
7. Regression results: Determinants of FDI 26
8. Instruments estimates for FDI 28
9. OLS regression results – FDI and growth 28
10. OLS regression results – FDI and non-oil growth 29
11. 2SLS regression results – FDI and growth 29
12. 2SLS regression results – FDI and non-oil growth 30
13. Differences between Nigeria and sub-Saharan Africa
(mean of selected variables) 31
14. Actual and percentage share of oil and non-oil export earnings in Nigeria 33
List of figures
1. FDI inflow into Nigeria, 1970–2002 14
2. Components
Evidence from Nigeria
By
Adeolu B. Ayanwale
Department of Agricultural Economics
Obafemi Awolowo University
Ole-Ife, Nigeria
AERC Research Paper 165
African Economic Research Consortium, Nairobi
April 2007
THIS RESEARCH STUDY was supported by a grant from the African Economic
Research Consortium. The findings, opinions and recommendations are those of the author, however, and do not necessarily reflect the views of the Consortium, its individual members or the AERC Secretariat.
Published by: The African Economic Research Consortium
P.O. Box 62882 - City Square
Nairobi 00200, Kenya
Printed by: Modern Lithographic (K) Ltd.
P.O. Box 52810-City Square
Nairobi 00200, Kenya
ISBN 9966-778-09-8
©
2007, African Economic Research Consortium.
Contents
List of tables
List of figures
Abstract
Acknowledgements
1. Introduction 1
2. Literature review 3
3. Some stylized facts about FDI in Nigeria 9
4. Theoretical framework 17
5. Methodology and analytical framework 19
6. Results and discussion 25
7. Summary and conclusion 35
References 37
List of tables
1. Nigeria: Net foreign direct investment inflow (US$ million) 9
2. Nigeria: Foreign direct investment, 1970–2002 10
3. Sectoral composition of FDI in Nigeria, 1970–2001 percentage 12
4. Basic statistics on FDI in Nigeria, 1970–2002 13
5. Summary statistics of included variables 21
6. Nigeria unit root tests for stationarity, 1970–2002 24
7. Regression results: Determinants of FDI 26
8. Instruments estimates for FDI 28
9. OLS regression results – FDI and growth 28
10. OLS regression results – FDI and non-oil growth 29
11. 2SLS regression results – FDI and growth 29
12. 2SLS regression results – FDI and non-oil growth 30
13. Differences between Nigeria and sub-Saharan Africa
(mean of selected variables) 31
14. Actual and percentage share of oil and non-oil export earnings in Nigeria 33
List of figures
1. FDI inflow into Nigeria, 1970–2002 14
2. Components
References: 3. Sectoral composition of FDI in Nigeria, 1970–2001 percentage 12 4 1. FDI inflow into Nigeria, 1970–2002 14 2 country other than that of the investor defined according to residency (World Bank, 1996) Sub-Saharan Africa as a region now has to depend very much on FDI for so many reasons, some of which are amplified by Asiedu (2001) from its acknowledged advantages (Sjoholm, 1999; Obwona, 2001, 2004). The effort by several African countries to improve their business climate stems from the desire to