The impact of major macroeconomic variables on foreign direct investment in Nigeria: evidence from a wavelet coherence technique

Tomiwa Adebayo (), Kelvin Onyibor () and Gbenga Daniel Akinsola ()
Additional contact information
Kelvin Onyibor: University of Manitoba
Gbenga Daniel Akinsola: Girne American University

SN Business & Economics, 2021, vol. 1, issue 1, 1-24

Abstract: Abstract Utilizing Nigeria as a case study, the investigators explored the linkages between FDI inflows and some selected macroeconomic indicators (exports, gross capital formation, trade openness, inflation, and economic growth) utilizing yearly data spanning between 1981 and 2018. The study used ARDL technique to capture the linkages between FDI inflows and its determining indicators. Furthermore, the wavelet coherence techniques was used. The main novelty of wavelet coherence is that it can obtain information on dynamic correlation and/or causality between economic variables at different frequencies and different time periods. Additionally, the FMOLS and the DOLS are employed as a robustness check to the ARDL long-run estimation. The findings from the ARDL long-run estimate reveal that exports and trade openness exert positive impact on FDI inflows. The findings from the FMOLS and DOLS backed ARDL results. Furthermore, the results of the wavelet coherence-based causality and wavelet correlation techniques further provide supportive evidence to the ARDL technique. To the authors' knowledge, no previous studies have used the wavelet coherence and wavelet correlation techniques to explore these dynamics. Based on these findings, policy directions were initiated.

Keywords: Foreign direct investment; Economic growth; ARDL; Wavelet correlation; Wavelet coherence; Nigeria (search for similar items in EconPapers)
JEL-codes: F31 F33 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://link.springer.com/10.1007/s43546-020-00018-5 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:snbeco:v:1:y:2021:i:1:d:10.1007_s43546-020-00018-5

Ordering information: This journal article can be ordered from
https://www.springer.com/journal/43546

DOI: 10.1007/s43546-020-00018-5

Access Statistics for this article

SN Business & Economics is currently edited by Gino D'Oca

More articles in SN Business & Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().