ABSTRACT
The study examined the extent to which Foreign Investment affects or determines the Economic Growth of Nigeria for the period covering 1979 -2011. A number of models were specified to determine the impact of foreign investment on gross domestic product and domestic investment. While foreign direct investment and foreign portfolio investment were specified as the predictor variables, direct investment and gross domestic investment were used as the outcome variables. The research estimated the specified models using the ordinary least squares method applied on time series annual data collected from the central bank of Nigeria statistical bulletin, 2012 edition. The results garnered from the data analyses indicated among other things that: foreign direct investment was positively and significantly related to both gross domestic product and direct investment. Although foreign portfolio investment was also positively related to gross domestic product and direct investment, its impact in both cases were not statistically significant. Given the above findings, the following recommendations were made: government and policy makers should encourage greater inflow of foreign investment by providing investment incentives in the area of reduced taxes and removal of bureaucratic bottlenecks for setting up and operating foreign businesses in the country. Finally, the government should also provide basic economic and social infrastructure in order to reduce the operating costs of doing business as well as provide being proactive in dealing with the challenges of operating in an ever changing global environment.
To this end, foreign investment (private) has become a subject of great interest especially to developing countries. This interest has been renewed in recent years for a number of reasons. First is the rapid growth in global foreign investment in the last two decades, and the possibility offered by foreign investment for channelling resources to developing countries that are in dire need of such resources. Other reasons advanced by pundits on why economic and political leaders in developing countries are so enamoured to foreign investment include among other things; that bringing in capital and foreign exchange, foreign investors help in filling the savings and foreign exchange gap in order to achieve the goal of economic development in developing countries.
In addition to the above, foreign investment also comes to developing countries bundled with managerial, administrative and technical personnel, new technology, research and innovation in products and better production techniques which are needed in developing countries. In view of the perceived gains as enumerated above that can accrue to countries that are able to attract a high level of foreign investment, it is understandable why developing countries all over the world are devising new policies that are aimed specifically at attracting more foreign investment.
Blomstrom and Kokko (2003) are of the opinion that the attitudes towards foreign direct investment has changed considerably over the years as most countries have liberalized their economic policies to attract investments from foreign multinational corporations. This attitudinal change towards foreign investment they add stems from the expectation that foreign multinational corporations will raise employment, exports and tax revenue and also that some of the knowledge brought by foreign companies will spill-over into domestic firms in the local economy.
Thus, an increasing number of host governments in a bid to woo foreign investors provide various forms of investment incentives to encourage inflow of foreign investment. UNCTAD (2001) reports that nearly 95% of all changes in national Foreign Direct Investment (FDI) legislations worldwide during the period 1991 to 2001 were specifically targeted at attracting foreign investors. A significant number of these changes focused on incentives for and promotion of FDI. Among the incentives provided are; Financial incentives such as grants and preferential loans, fiscal incentives such as tax holidays as well as measures like market preferences, infrastructure and sometimes even monopoly rights (Brewer and Young, 1997). ............... FOR ACCESS TO THE FULL PROJECT WORK, USE THE ORDER NOW! BUTTON BELOW
INTRODUCTION
................ In most developing countries, there is need to attract a flow of net inward foreign investment in some form and for an extended period as a supplement to domestic savings during the process of development. Thus, a nation must be able to generate inflows of foreign funds in the form of direct investment, traditional private and official portfolio investment, modern portfolio investment or Official Development Assistance (ODA) to supplement its sustainable development initiatives. In the absence of a substantial increase in Official Development Assistance and other subsidized flows, the flow of private capital from the industrialized countries is perceived by the developing countries as the next best source to fill in the savings gap.To this end, foreign investment (private) has become a subject of great interest especially to developing countries. This interest has been renewed in recent years for a number of reasons. First is the rapid growth in global foreign investment in the last two decades, and the possibility offered by foreign investment for channelling resources to developing countries that are in dire need of such resources. Other reasons advanced by pundits on why economic and political leaders in developing countries are so enamoured to foreign investment include among other things; that bringing in capital and foreign exchange, foreign investors help in filling the savings and foreign exchange gap in order to achieve the goal of economic development in developing countries.
In addition to the above, foreign investment also comes to developing countries bundled with managerial, administrative and technical personnel, new technology, research and innovation in products and better production techniques which are needed in developing countries. In view of the perceived gains as enumerated above that can accrue to countries that are able to attract a high level of foreign investment, it is understandable why developing countries all over the world are devising new policies that are aimed specifically at attracting more foreign investment.
Blomstrom and Kokko (2003) are of the opinion that the attitudes towards foreign direct investment has changed considerably over the years as most countries have liberalized their economic policies to attract investments from foreign multinational corporations. This attitudinal change towards foreign investment they add stems from the expectation that foreign multinational corporations will raise employment, exports and tax revenue and also that some of the knowledge brought by foreign companies will spill-over into domestic firms in the local economy.
Thus, an increasing number of host governments in a bid to woo foreign investors provide various forms of investment incentives to encourage inflow of foreign investment. UNCTAD (2001) reports that nearly 95% of all changes in national Foreign Direct Investment (FDI) legislations worldwide during the period 1991 to 2001 were specifically targeted at attracting foreign investors. A significant number of these changes focused on incentives for and promotion of FDI. Among the incentives provided are; Financial incentives such as grants and preferential loans, fiscal incentives such as tax holidays as well as measures like market preferences, infrastructure and sometimes even monopoly rights (Brewer and Young, 1997). ............... FOR ACCESS TO THE FULL PROJECT WORK, USE THE ORDER NOW! BUTTON BELOW
TABLE OF CONTENT
1.11 BACKGROUND OF THE STUDY 1
1.12 STATEMENT OF THE PROBLEM 5
1.13 PURPOSE OF THE STUDY 7
1.14 RESEARCH QUESTIONS 8
1.15 RESEARCH HYPOTHESES 9
1.16 SIGNIFICANCE OF THE STUDY 9
1.17 DEFINITION OF TERMS 10
1.18 LIMITATIONS OF THE STUDY 12
1.19 SCOPE OF THE STUDY 12
1.20 ORGANIZATION OF THE STUDY 13
REFERENCES 14
CHAPTER TWO: REVIEW OF RELATED LITERATURE
2.0 INTRODUCTION 15
2.1 THEORETICAL FRAMEWORK 17
2.2 CONCEPTUAL CLARIFICATION 21
2.3 REGULATORY ENVIRONMENT OF FOREIGN INVESTMENT IN NIG. 24
2.4 INSTITUTIONAL ARRANGEMENT FOR FDI PROMOTION IN NIG 27
2.5 SPECIFIC GOVT MEASURES TO ATTRACT FOREIGN INVESTMENT 29
2.5.1 Entry and Establishment of FDI 30
2.5.2 Funds Transfer 32
2.5.3 Dispute Settlement 33
2.5.4 Taxation 33
2.5.5 Labour 34
2.6 STRUCTURE & TREND OF FOREIGN INVESTMENT IN NIG 34
2.7 FOREIGN INVESTMENT AND THE NIGERIAN ECONOMY 38
2.7.1 The Oil Industry 39
2.7.2 The Manufacturing Sector 39
2.7.3 The Services Sector 40
Telecommunications Sub-sector 40
Power Sub-sector 41
Transport Sub-sector 42
2.9 REVIEW OF EMPIRICAL EVIDENCE 43
REFERENCES 50
CHAPTER THREE: RESEARCH METHODOLOGY
3.0 INTRODUCTION 56
3.1 RESEARCH DESIGN 56
3.2 SAMPLE PROCEDURE AND DATA COLLECTION METHOD 57
3.3 OPERATIONAL MEASURES OF VARIABLES 57
3.4 DATA ANALYSES TECHNIQUES 58
3.4.1 MODEL SPECIFICATION 60
REFERENCES
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS
4.0 INTRODUCTION 62
4.1 DATA PRESENTATION 63
4.2 DATA ANALYSIS 65
4.3 TESTING OF HYPOTHESES 69
4.4 DISCUSSION OF FINDINGS 72
CHAPTER FIVE
SUMMARY OF FINDINGS, CONCLUSIONS AND RECOMMENDATIONS
5.1 SUMMARY OF FINDINGS 81
5.2 CONCLUSION 83
5.3 RECOMMENDATIONS 86
REFERENCES 89
APPENDICES 98
Reference Code: C070
Reference Code: C070
115 Pages
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