Foreign Direct Investment And Inclusive Growth: The Role Of The Financial Sector Development In Nigeria, 1981-2020

Aham Emeka NKORO and Kelvin Uko

Applied Econometrics and International Development, 2023, vol. 23, issue 1, 77-100

Abstract: This study examined the role of the domestic financial sector development in the relationship between foreign direct investment (FDI) inflows and inclusive growth in Nigeria over the period 1981-2020 using annual time series. Empirically, the result revealed that the FDI exerted a significant positive effect on inclusive growth when the domestic financial sector has reached a certain minimum level of development. The result further showed that the FDI alone presents a significant negative effect on inclusive growth. This is evidence that the domestic financial sector development is a pre-condition for FDI to effectively promote inclusive growth in Nigeria.

Keywords: Inclusive Growth; Foreign Direct Investment; Financial Sector Development; Threshold Level; ARDL Approach; Time series; Nigeria. (search for similar items in EconPapers)
JEL-codes: E44 F21 F23 F43 O54 (search for similar items in EconPapers)
Date: 2023
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