The Impact Of Foreign Direct Investments (Fdis) On Economic Growth In Nigeria (1986-2012)

ABSTRACT

Most economic rationale for granting special incentive for attracting foreign direct investment [FDI], is based on the belief that FDI bridges the “Ideal gaps” between the rich and the poor nations, in addition to the generation of technological transfer and spillovers. Empirical literature however finds controversial, the effect of FDI on productivity growth. This work contributes to the existing studies by applying correlation and causality test in exploring the possible links between FDI and economic growth in Nigeria. We determined the contributory factors to FDI and empirically tested the endogeniety theory of FDI. This study concluded that the link between FDI and economic growth in Nigeria is very weak. However, FDI is found to be related to export growth, while human capacity building is found to be unrealistic in Nigeria. The study therefore, recommends infrastructural development, human capacity building and strategic policy changes towards attracting FDI flow.

Keywords: Economic Growth, FDI, Foreign Direct Investment, Human Capacity Building