Direct Foreign Investment and Firm-level Productivity in the Nigerian Agro/agro-allied Sector

Abstract

The acknowledged benefits of the DFI seems to be more than the demerits, and this seems to explain the current move of developing countries, seeking to attract private DFIs by removing the structural barriers and encouraging foreign investors. This study examines the impact of DFI on productivity at the firm-level in the agro/ agro-allied sector of the Nigerian economy as an example of developing countries. Data were obtained from agro/ agro-allied companies listed in the first tier market (comprising firms with some foreign compo-nents), and the second tier foreign exchange markets (involving domestically owned firms) as contained in the publications of the Nigerian Stock Exchange Commission and Central Bank of Nigeria. Data were analysed using descriptive statistics, correlation and regression techniques to achieve the stated objectives of the study. A comparison of the firm level productivity measures show that foreign firms' productivity is higher than that of their domestic counterpart. The results of the impact of DFI on productivity growth showed that there is positive and significant spillover effect at the firm level. However, the extent of the spillover may not extend to the sectoral level.

An analysis of causal nexus between foreign direct investment, exchange rate and financial market development in Nigeria (1970 to 2009)

“…FDI depicted positive relationship with financial market development while the real EXR depicts negative relationship with MKT. This was in contrast with earlier results (like Ayanwale and Bamire, 2001;Akinlo, 2004) which found a negative relationship between FDI and economic growth in Nigeria.…”

“…Existing studies consider either the relationship between FDI and economic growth (Adelegan, 2000;Ayanwale and Bamire, 2001;Jerome and Ogunkola, 2004) or the relationship between financial market development and economic growth (Yartey, 2008;Yartey and Adjasi, 2007). Less attention has been paid to the possible causal nexus between FDI and stock market development in Nigeria.…”

Exports, Foreign Direct Investment and Economic Growth: An Empirical Application for Nigeria

“…The study found that foreign private investment, domestic investment growth and net export growth positively influenced economic growth in Nigeria. Similarly, Ayanwale and Bamire (2004), and Ayashagba and Abachi (2002) found positive effect of FDI on economic growth for Nigeria.…”

Foreign Direct Investment and the Nigerian Economy

“…noted that export, labour, and human capital are positively related to economic growth in Nigeria. Ayanwale and Bamire (2001) assess the influence of FDI on firm level productivity in Nigeria and report a positive spillover of foreign firms on domestic firm's productivity. Oyinlola (1995) conceptualized foreign capital to include foreign loans, direct foreign investments and export earnings.…”