Journal of
Economics and International Finance

  • Abbreviation: J. Econ. Int. Finance
  • Language: English
  • ISSN: 2006-9812
  • DOI: 10.5897/JEIF
  • Start Year: 2009
  • Published Articles: 323

Article in Press

Outpouring of foreign direct investment in Nigeria: Push or pull?


  •  Received: 11 June 2020
  •  Accepted: 02 September 2020
Foreign direct investment is sensitive to domestic and external factors. The sensitivity to external factors means changes in global productivity levels (financial sentiments) may produce a substantial impact on foreign direct investment in Nigeria has been one of the key subjects in the extent literature. The study is aimed at examining the pull and push factor determinants of foreign direct investment to Nigeria. The study adopted the Autoregressive Distributed Lag Approach to achieve the long and short-run determinants. The study uses secondary data sets from 1986 to 2018 with the application of EViews 9 output to analyze data. Findings from the model shows that foreign direct investment is sensitive to domestic (depreciation of exchange rate and interest rate) and external factors (US gross domestic product and US interest rate) both in the long and short run. The study concludes that foreign direct investment into Nigeria is due to ‘pull’ factors rather than ‘push’ factors. The implication of the study showed that foreign direct investment flow surges cannot be denied in determining the macroeconomic performance in Nigeria. The choice of foreign direct investment seems to future more in Nigeria’s economy. Understanding of the factors that drives foreign direct investment can inform efforts by government and expert on how best to attract foreign direct investment to Nigeria. The study concluded that the fluctuation in Foreign direct investment is determined by both domestic and global factors. These factors had a differential impact on foreign direct investment volatility. Consequently, the study recommended the need for the judicious managing of these determinants to guarantee reduced volatilities which are important for the growth of the internal economic especially at this time when the Nigerian economy is in great need of foreign investment owing to the continuous fall in global crude oil price and the recession facing the economy.

Keywords: Foreign Direct Investment, Gross Domestic Product, Capital Flows, Economic Performance, Determinants of FDI