Oil and Non-Oil Foreign Direct Investment and Economic Growth in Nigeria: An Empirical Evidence from Autoregressive Distributed Lag Model

Mustapha Hussain and Abdullahi Mohammed

MPRA Paper from University Library of Munich, Germany

Abstract: Abstract The paper examines the impact of both oil and non-oil foreign direct investment (FDI) on economic growth in Nigeria for the period 1980. The paper employed ARDL Approach to Cointegration and conditional EC Model in order to ascertain the long run and short-run relationships between the two categories of FDI (oil and non-oil), investment, export and economic growth. Bound cointegration test established that there is long run equilibrium relationship among the variables. Evidence from short run and long run elasticities shows that while non-oil FDI has positive effect on the growth of GDP, oil FDI exerts a negative effect on the economy and this may be due to the high profit repatriation and low level of domestic employment in the subsector. The result further shows that domestic investment has significant positive effect on economic growth, the coefficient of export is also positive although insignificant. In this study, we show that economic growth in Nigeria is largely propel by increasing inflows of FDI in the non-oil sectors, real export of goods and services and increased domestic investment.

Keywords: Keywords FDI; Oil and non-oil FDI; Economic growth; ARDL (search for similar items in EconPapers)
JEL-codes: F21 F42 F43 (search for similar items in EconPapers)
Date: 2017-08-10, Revised 2016-05-08
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Published in American Journal of Economics 2017, 7(4): 194-200.7(4)(2017): pp. 194-200

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