The Effect of Exchange Rate and Inflation on Foreign Direct Investment and Its Relationship with Economic Growth in Nigeria

Alex Ehimare Omankhanlen ()
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Alex Ehimare Omankhanlen: Department of Banking and Finance, Covenant University, OTA, Ogun State, Nigeria

Economics and Applied Informatics, 2011, issue 1, 5-16

Abstract: This study is on the effect of exchange rate and inflation on foreign direct investment and its relationship with economic growth. Its main objective is to find the effect of inflation and exchange rate and the bidirectional influences between FDI and economic growth in Nigeria. A thirty year period was studied. A linear regression analysis was used on the thirty year data to determine the relationship between inflation, exchange rate, FDI inflows and economic growth. The study reveals that FDI follow economic growth occasioned by trade openness which saw the entry of some major companies especially the telecommunication companies, while Inflation has no effect on FDI. However exchange rate has effect on FDI.

Keywords: Inflation; Exchange rate; Foreign direct investment (search for similar items in EconPapers)
JEL-codes: E31 F21 F31 (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (11)

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Persistent link: https://EconPapers.repec.org/RePEc:ddj:fseeai:y:2011:i:1:p:5-16

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