European Journal of Accounting, Auditing and Finance Research (EJAAFR)

EA Journals

Empirical Analysis of Agricultural Foreign Direct Investment on Capital Market Performance in Nigeria (1981-2018)

Abstract

There is a widespread perception that Foreign Direct Investment (FDI) aids economic growth in Nigeria evident by various contributions made by researchers on this phenomenon, but these attendant benefits must be transmitted through one of the viable real sectors, and one of such sectors is the agricultural sector. Understanding the linkage between the flows of foreign direct investment to agricultural sector as if affects capital market becomes imperative since the capital market enhances financial stability in the country. Using descriptive analysis, Augmented Dickey-Fuller (ADF), parsimonious error correction model, this paper therefore examined the effect of agricultural foreign direct investment on capital market performance in Nigeria from 1981 -2018. Basically data used in this study are exchange rate, trade openness, agricultural foreign direct investment and total market capitalization sourced from Central Bank of Nigeria(CBN) statistical bulletin 2018, The result obtained shows that the inflow of FDI to agricultural sector does not follow a regular pattern as agricultural FDI has long run positive  relationship with capital market performance,   exchange rate has negative relationship with the explained variable, trade openness also maintained a slow but positive relationship with capital market performance. The study concluded that there exist relationship between the phenomenons of the study, based on these findings, it is recommended that there is need for the government to device several means that would motivate the foreign investors to diversify their investment from oil sector to the agricultural sector since it has a positive influence on the capital market performance. Secondly, government needs to redesign the existing exchange rate policy and ensure full implementation of policy that would revive the value of our local currency.

Citation: Eze Gbalam Peter and Okoyan Krokeme (2021)  Empirical Analysis of Agricultural Foreign Direct Investment on Capital Market Performance in Nigeria (1981-2018), European Journal of Accounting, Auditing and Finance Research, Vol.9, No. 7, pp.20-37

Keywords: Agricultural Sector, Exchange Rate, Foreign Direct Investment, capital market performance.

cc logo

This work by European American Journals is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 4.0 Unported License

 

Recent Publications

Email ID: editor.ejaafr@ea-journals.org
Impact Factor: 7.77
Print ISSN: 2053-4086
Online ISSN: 2053-4094
DOI: https://doi.org/10.37745/ejaafr.2013

Author Guidelines
Submit Papers
Review Status

 

Scroll to Top

Don't miss any Call For Paper update from EA Journals

Fill up the form below and get notified everytime we call for new submissions for our journals.