Factors Determining FDI in Nigeria: Role of Emerging Economies

Soumyananda Dinda ()

MPRA Paper from University Library of Munich, Germany

Abstract: This paper investigates the determinants of FDI in Nigeria, which is poor in terms of income but rich in natural resources. This study is an extension of our earlier work (Dinda 2012). Incorporating emerging trade partners of Nigeria in VECM this paper re-examine the factors determining FDI inflow to Nigeria in this globalized era. The economic activity of the emerging trade partners may be good proxy for exogenous factors to Nigerian economic activity. Considering per capita income of trading partners as proxy for their economic activities are incorporated as exogenous variables in this study. Findings clearly ensure that FDI inflow to Nigeria is resource-seeking FDI and market size has no role that contradicts our earlier result and also the existing literature. Short run dynamics as well as causal linkage are also completely different from our earlier paper. China is emerging as a strong trade partner of Nigeria and significantly influences its natural resource outflow while South Africa raises its competitiveness.

Keywords: FDI; Natural resource export; exchange rate; openness; inflation rate; VECM; Emerging economy; Nigeria; China; South Africa (search for similar items in EconPapers)
JEL-codes: C13 C32 F12 F21 O13 Q32 Q43 (search for similar items in EconPapers)
Date: 2012-07-18, Revised 2012-07-20
New Economics Papers: this item is included in nep-afr
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https://mpra.ub.uni-muenchen.de/46914/1/MPRA_paper_40192.pdf revised version (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:40192

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