Capital Inflow and Industrial Performance in Nigeria: Including the Excluded

Ibrahim Adekunle, Ayomide Ogunade, Toluwanimi Kalejaiye and Adewale Balogun
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Ibrahim Adekunle: Olabisi Onabanjo University, Ago-Iwoye, Nigeria
Ayomide Ogunade: Olabisi Onabanjo University, Ago-Iwoye, Nigeria
Toluwanimi Kalejaiye: Ijagun, Ogun State, Nigeria
Adewale Balogun: Olabisi Onabanjo University, Ago-Iwoye, Nigeria

No 20/021, Research Africa Network Working Papers from Research Africa Network (RAN)

Abstract: Africa most populous black nations remain underdeveloped, mainly due to shambolic industrial sector performance. Rising problems of insecurity, corrupt practices, consumerism structure have made gains from capital inflows minimal. Little empirical credence has been leaned to the capital inflow-industrial output growth relationship in Nigeria. This anomaly has resulted in shortsighted policy formulation and attendant consequences. This paper examined international capital flows and industrial performance in Nigeria. The paper employed the two-step Engle and Granger estimation procedure and the Granger Causality to estimate parameters of the indices of industrial output growth and capital inflows to Nigeria. Findings revealed that labour participation, gross fixed capital formation, foreign direct investment (FDI) and portfolio investment have a significant positive relationship with industrial performance in Nigeria. Findings also revealed unidirectional causality from labour participation, gross fixed capital formation, foreign direct investment (FDI) and portfolio investment to industrial performance in Nigeria. Based on the findings, the Nigerian government should create an enabling environment to attract more capital inflow that could augment domestic resources with the sole aim of growing the industrial sector.

Keywords: Capital Inflow; Industrial Performance; Error Correction Modelling; Granger Causality; Nigeria (search for similar items in EconPapers)
JEL-codes: C22 F21 P47 (search for similar items in EconPapers)
Pages: 23
Date: 2020-01
New Economics Papers: this item is included in nep-eff and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Forthcoming in Jurnal Ekonomi & Studi Pembangunan, 21(2), 2020

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