For correspondence:-
Received: February 28, 2021 Accepted: March 29, 2021 Published: March 31, 2021
Citation: Economic Development and Foreign Capital Investment Inflow in Nigeria. Account Tax Rev 2006; 5(1):80-94 doi:
© 2006 The authors.
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Abstract
The study investigates the influence of economic development on the foreign capital investment inflow in Nigeria. The time series secondary data covering the period 1990 to 2019 used for the study were obtained from the Central Bank of Nigeria Statistical Bulletin, Nigeria Stock Exchange fact sheet, Journals libraries and Internet. The study analyzed the data with the use of unit root test to determine the stationarity or otherwise of the time series data employing Augmented Dickey Fuller (ADF) and Phillip-Perron (PP) unit root test. Vector Error Correction Estimates was deployed in determining the influenceof the independent variables on the dependent variable. Granger causality test was also applied in establishing the direction of causality among the variables of the study. The findings revealed that gross domestic product (GDP) and market capitalization (MCAP) has positive but insignificant influence on foreign capital investment inflow in Nigeria. The granger causality resultconfirms evidence of bi-directional causality movement between gross domestic product (GDP) and foreign capital investment inflow (FCII) in Nigeria. It is recommended that by deliberate effort, the Nigeria authority should improve capital expenditure spending on infrastructure of relevant sectors that will ensure enhancement of economic growth.
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