EconPapers    
Economics at your fingertips  
 

A Re-examination of the Relationship between Foreign Capital Flows and Economic Growth in Nigeria

Wasiu Adekunle () and Mubaraq Sulaimon

MPRA Paper from University Library of Munich, Germany

Abstract: Abstract The study was carried out to re-examine the relationship between foreign capital flows and economic growth in Nigeria by collecting annual data over the period of 1986 to 2015 from various sources. The study employed a combination of stationary and nonstationary series. Similarly, irrespective of specifications, the study reported the absence of a long-run relationship between economic growth and its determinants in Nigeria. Furthermore, owing to absorptive capacity constraints (such as, infrastructural deficit, underdeveloped local financial market and negative and/or very weak positive spill-over effect on domestic investment), net FDI inflows exerted positive short-run influence on growth, while net portfolio flows and net foreign remittance had significant negative short-run effects on growth. Also, lower levels of net foreign aids and net external debt promote growth, while excessive levels of these flows dampen growth. All these imply that the relationship between foreign capital flows and economic growth in Nigeria is both linear and nonlinear. It is therefore recommended that policy makers in Nigeria encourage the inflow of capital that would be beneficial to the nation, in terms of stimulating domestic investment and economic growth. Putting measures in place to develop the nation’s financial sector is also suggested to attract and make efficient use of capital flows in the country.

Keywords: Keywords: Foreign capital; Economic growth; and Financial crisis (search for similar items in EconPapers)
JEL-codes: F2 F21 F23 F24 F29 (search for similar items in EconPapers)
Date: 2018-05-31
New Economics Papers: this item is included in nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/87754/1/MPRA_paper_87754.pdf original version (application/pdf)

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:pra:mprapa:87754

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().

 
Page updated 2021-06-12
Handle: RePEc:pra:mprapa:87754