The Influence of Government Fiscal Policy on Foreign Direct Investment in Nigerian Economy

Samson Ogege () and Tarila Boloupremo ()
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Samson Ogege: University of Lagos
Tarila Boloupremo: University of Africa

The Journal of Accounting and Management, 2020, issue 3(10), 88-96

Abstract: This paper appraises the influence of the government fiscal policy on foreign direct investment (FDI) in the economy of Nigeria pre and post-military rule. To achieve the objectives of this work, time series data spanning from 1981-1999 (military era) and 2000-2018 (post-military era) were employed and analyzed with the aim of assessing the influence of fiscal policy on FDI during these significant political periods in the annals of the country. In order to prevent the presence of false estimation outcomes, the Augmented Dickey Fuller test was employed to assess the stationarity and sequence of integration of the variables. The Ordinary Least Square technique and correlation analysis were deployed to test the longrun association that exists among the variables. The outcomes of the analysis reveal inflation has a significant positive influence on FDI in the military era in Nigeria; government expenditure is positively and significantly associated with FDI for both military and post military era; government domestic debt is adversely and insignificantly associated with FDI for both military and the post military era; foreign exchange rate is positively and significantly associated with FDI in the military and adversely associated with FDI in post-military era. The results further suggest the existence of a positive and insignificant association of government tax revenue with FDI for both military and post-military era.

Keywords: Fiscal policy; FDI, Government expenditure; Inflation; Exchange rate (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:dug:jaccma:y:2020:i:3:p:88-96

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