The Determinants Of Foreign Direct Investment (Fdi) Inflows In Nigeria: A Causality Analysis On Nigeria
The researcher empirically evaluated the determinants of foreign direct investment (FDI) inflows in Nigeria: a causality analysis. The study isolated and analyzed annual data collected through secondary sources, on some relevant variables such as FDI inflows, interest rate, fiscal policy, exchange rate, market size, infrastructure, trade openness and natural resource availability. The data were analyzed using multiple regression, descriptive statistics, Johansen co-integration technique, unit root tests and Pairwise Granger causality tests. The results indicated that FDI inflows were significantly influenced by all the independent variables except monetary policy rate and government fiscal balance. However, the causal relationship was uni-directional, running from exchange rate and infrastructure to FDI inflows which implies that the two independent variables were the principal factors determining the dependent variable. The study therefore, recommends that the other variables (dependent and independent) be further strengthened, to engender competitiveness in the economy.
Keywords- Foreign direct investment, Determinant, Causality