Tag Archives: Foreign Direct Investment

Does Real Exchange Rate Volatility Matters For Foreign Direct Investment (FDI) Inflow? An Empirical Reflection of the Nigerian Situation (Published)

The research has been on the Real Exchange Rate (RER) and Foreign Direct Investment (FDI) inflow.  This has become necessary given the declining competitiveness of the Nigeria currency and  economy.  The study covered the period between 1981 and 2017.  The Cointegration and the Error correction Model of the Ordinary least squares technique were used to analyze the data. The result of the Augmented Dickey Fuller (ADF) unit root test indicates that the variables became stationary after the first difference was taken.  The Johansen Cointegration test indicates a long run equilibrium relationship among the variables.  Also the result of the parsimonious Error Correction Model (ECM) indicates that the volatility of the Real Exchange Rate (RER) has a negative and significant impact on the inflow of Foreign Direct Investment (FDI) into Nigeria. The openness of the economy has a positive and significant relationship with the Foreign Direct Investment (FDI). The interest rates has a negative and significant impact on the Foreign Direct Investment (FDI) inflow.  It was therefore recommended amongst others  that the government should not only concentrate on the  manipulation of the exchange rate but should make concerted efforts to diversify the productive base of the economy so as to increase the competiveness of the Nigerian economy and hence its currency.

Keywords: Cointegration, Foreign Direct Investment, Real Exchange Rate, Real Exchange Rate Volatility

Foreign Direct Investment in Nigeria: Examining the Statutory Reach (Published)

A fundamental shift in economic policy in Nigeria is the focus on a market driven economy and the diversification of the revenue source expressed in the quest and solicitation for foreign direct investment (FDI) and entails a private sector-led growth strategy with foreign investors as its focal target. In order to attract the necessary foreign investments, Nigeria has increased efforts at liberalizing foreign investment entry through policies and statutes to reinvigorate the investment architecture. This paper examines the statutory framework for FDI to ascertain if the depth and pith inures for a sustained and profitable foreign investment inflow. The paper finds that inflow of foreign investment into Nigeria is impacted negatively by uncompetitive investment legislations. It recommends that the laws governing foreign direct investor be reviewed to provide for a wider platform for dispute resolution and investor confidence in the areas of implementation, compliance and supervision to assure their competitiveness.

Keywords: Foreign Direct Investment, Globalization, capital inflow, investor confidence

Real Effective Exchange Volatility and Fdi Sustainability: Implications for the Nigerian Economy (Published)

The paper investigates the empirical evidence of Real Effective Exchange Rate Volatility and FDI inflow into Nigeria. The vital role of FDI in bridging the development gap and the impediment caused by the volatility in the Real Effective Exchange Rate have been attested to by various literature There has been no consensus by studies in this issue as regards whether Real Effective Exchange Rate volatility has a negative or positive effect on the FDI. In addition, the investigation of such relationship has been grossly ignored in the Nigerian literature The main objective is thus to empirically investigate the relationship between the volatility in the Real Effective Exchange Rate and the level of FDI in Nigeria. The study covered the period between 1981 and 2016. The Ordinary Least Squares technique was used in analyzing the data. Specifically, the ECM and the cointegration models were adopted. The results indicate that the one period lagged FDI has a significant and positive impact on the current FDI. The REER has an insignificant and positive impact on the FDI. The REERV has a significant and negative impact on the FDI. The result indicates further that the REERV has a negative and significant impact on the FDI. Openness of the economy o has a positive and significant impact on the REER The paper recommends a production based devaluation of the Nigerian REER.     

Keywords: Error Correction Mechanism, Foreign Direct Investment, Real Effective Exchange Rate, Real Effective Exchange Rate volatility, openness

The Impact of Foreign Direct Investment and Import, Export on the Economic Growth of Pakistan: An Empirical Study (Published)

Purpose: The aim of this paper is to analyze the impact of foreign direct investment (FDI), export (EXPO) and import (IMP) in the economic growth of Pakistan from 1990 to 2015. Design/methodology/approach: The link of foreign direct investment (FDI), export (EXPO) and import(IMP) with economic growth is measured through multiple regression model. Foreign direct investment (FDI), export (EXPO) and import (IMP) treated as regrassors and gross domestic product (GDP) treated as regressand in this model.Eviews software used to analyze the annual time series data from 1990 to 2015. Findings: According to the findings, there is a negative and insignificant association between foreign direct investment (FDI) and GDP while there is significant and positive relationship found of export (EXPO) and import (IMP) with GDP. Originality/value: The empirical findings of this research play a vital role for policy maker of Pakistan in formulation of FDI and trade policies.

Keywords: Export, Foreign Direct Investment, GDP, economic growth, import

Fluctuation Rate Analysis of Rupiah Exchange in the Indonesian Open Economy (Published)

This research aimed to analyze the long-term balance between KURS (Rate of Exchange), inflation (INF), Foreign Direct Investment (FDI), interest rate of Bank Indonesia (SBI), and the degree of openness of Economics (DKE) An open economy Indonesia using time series data period 1998: 1-2016: 4. Models Autoregressive Distributed Lag (ARDL) was used to observe the effect of these variables. The results show that there is a balance of long-term fluctuations in the exchange Rate against the US dollar which is influenced by the variable inflation and SBI are negatively correlated with the exchange rate. While the FDI variable and the degree of economic openness is positively correlated with the exchange rate. The degree of openness of the economy, inflation, FDI leads to fluctuations on the exchange rate. In the long term, SBI gives a significant effect on the exchange rate. Among the exchange rate with the degree of economic openness has a positive and significant impact. This means that increasing the degree of economic openness, it will result in the appreciated (US dollar depreciated). Economic openness leads to significant fluctuations in exchange rates in the short term and long term.

Keywords: Autoreggressive Distribured Lag (ARDL), Degree of Openness, Exchange rate rupiah/US $, Foreign Direct Investment, Inflation, Interest Rate of Bank Indonesia

The Attractiveness of Investment in the Arab Countries: Comparative Study (Published)

The flow of investments in developing countries differs across countries. We have been focusing on this research on foreign direct investment as one type of foreign investment due to the lack of capital markets in some Arab countries. Investment comprises foreign direct investment (FDI) their role is one of these kinds of investments that inflows have provided the strong impetus for economic development across countries. The paper tries to make a comparison between Poland and some Arab countries in stability period in Arab region 2005-2010. The results show that the Poland has the higher attractive investment while in key determinants factors some Arab countries are in better position than Poland.

Keywords: Arab Countries, Attractive Investment, Composite indicator, Foreign Direct Investment, Key determinate’s, Poland

The Attractiveness of Investment in the Arab Countries: Comparative Study (Published)

The flow of investments in developing countries differs across countries. We have been focusing on this research on foreign direct investment as one type of foreign investment due to the lack of capital markets in some Arab countries. Investment comprises foreign direct investment (FDI) their role is one of these kinds of investments that inflows have provided the strong impetus for economic development across countries. The paper tries to make a comparison between Poland and some Arab countries in stability period in Arab region 2005-2010. The results show that the Poland has the higher attractive investment while in key determinants factors some Arab countries are in better position than Poland.

Keywords: Arab Countries, Attractive Investment, Composite indicator, Foreign Direct Investment, Key determinate’s, Poland

IMPACT OF THE NIGERIAN CAPITAL MARKET ON THE ECONOMY (Published)

There are elements upon which a nations’ economic development are dependent. The importance of Capital Market as one of the vehicles upon which most under-developed economies could grow cannot be overemphasized. The extent to which these economies experience the said growth is quite relative to the level of awareness and management of the market. Nigeria is not left out in the desire to maximize the gains of the capital market to boost its economy. This paper empirically examines the impact of the Nigerian Capital Market on the Nigerian economy looking at a 20 years period from 1992 to 2011. The Nigerian Capital Market was proxy as Market Capitalization against some variables of the economy such as Gross Domestic Product (GDP), Foreign Direct Investment, Inflation Rates, Total New Issues, Value of Transaction and Total Listing. Using the multiple regression analysis, we find that Capital Market has an insignificant impact on the Economy within the period under review. The study therefore advised that policies and measures that would boost investors’ confidence should be enshrined in the running of Nigerian Capital Market so that it could contribute significantly to the growth of Nigerian economy noting that all elements of the market are essential ingredients to the development of a nation.

Keywords: Capital market, Foreign Direct Investment, GDP, Inflation Rate, Total new issues, Value of Transaction, and Total listing