THE DYNAMIC LINAGES ETWEEN INVESTMENT AND SUSTAINALE ECONOMIC GROWTH IN NIGERIA
Author: Benedict Anayochukwu Ozurumba
Volume: 60 Issue No:1 Year:2018
Abstract: The paper empirically analysed the econometric dynamics of foreign and domestic investments for sustainable growth in Nigeria. In carrying out the investigation, expost research method, focusing on secondary sourced data on foreign direct investment (FDI), foreign portfolio investment (FPI) and domestic investment (DIN) inflows and real gross domestic product (GDP) were used. Econometric analytical procedure that involved descriptive statistics, stationarity test, granger causality test, cointegration test, vector error correction model (VECM) as well as impulse response to shocks was employed to answer research uestions and test stated hypotheses. The findings show that significant long run relationship exist between investment sources and economic growth in Nigeria; specifically, the effects of FDI and DIN are significantly positive, while that of FPI is negative. Also, FDI appears to exert significant shocks on Nigerias economic growth, though the level of shock does not seem to crowd out DIN. On the other DIN shocks does not seem to have significant effects on foreign investment inflows. Based on the findings, the study concludes that increased domestic investment is needed to provide the enabling environment that minimies the domestic investment risk profile of the Nigerian business environment. Collaborative (public and organied private sector) intervention efforts by way of policies, programmes and projects need to be made to develop critical infrastructure (roads, power and security) as this will ease the burden of doing business in Nigeria, thereby attracting private investors from both local and foreign sources.
JEL Classification: E22, E62, G11, O47
JEL Classification: E22, E62, G11, O47
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