Effects of the Determinants of Foreign Direct Investment in Nigeria: Error Correction Mechanism

Ebire, Kolawole; Onmonya, O Lucky; Inim, Victor

doi:10.20448/journal.501.2018.52.155.164

Cited by 4 publications

(1 citation statement)

References 9 publications

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“…The outcome suggests that the rise in military expenditure in the countries under study negatively affected FDI in ow. The study's ndings align with the neoclassical view that military expenditure crowds-out investments (Aziz & Khalid, 2017; Kolawole et al, 2018). The low in ow could be due to the diversion of economic resources (supposedly used for providing basic infrastructure that will facilitate the in ow of FDI) from the real sector of the economy to the defense sector.…”

Section: Resultssupporting

confidence: 76%

Foreign Direct Investment and Military Expenditure in the Face of Terrorism: Evidence from Sub-Saharan Africa.

Alhaji

2024

Preprint

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This study examines the relationship between military expenditure and foreign direct investment (FDI) amid terrorism. The study used Mean Group, Pooled Mean Group, Dynamic Fixed Effect, and Panel Quantile estimations techniques on 23 terrorized countries in Sub-Sharan Africa from 1999 to 2019. The outcome of the estimate discovered that military expenditure in the absence of terrorism negates FDI flow. But, amid terrorism, military expenditure has a significant positive impact on FDI inflow. Also, the results show that the effect varies at different quantiles. The results are robust using death from terrorism attacks to measure terrorism on a different model. The study suggests that countries should desist from high military spending in the absence of terrorism to facilitate FDI flow. Countries in mid-life terrorism should enhance military spending and augment military strategy with other options to boost investors' confidence in the economy's high influx of FDI. JEL Classification: C33, F21, F52, H53

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Section: Resultssupporting

confidence: 76%

Foreign Direct Investment and Military Expenditure in the Face of Terrorism: Evidence from Sub-Saharan Africa.

Alhaji

2024

Preprint

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Empirical evidence of the relationship between terrorism and firm financial performance in Nigeria

Okafor

Calderon

2022

IJOEM

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PurposeThis paper investigates the relationship between terrorism and firm financial performance in Nigeria. The country has become one of the riskiest countries in Sub-Saharan Africa due to the intensity of recent terror attacks. Also, there is a growing focus on the importance of firms, given firms' economic contribution towards growth, employment and economic and industrial transformation. However, no study has tried establishing a relationship between terrorism and firm financial performance. Therefore, providing empirical proof of this relationship is the primary purpose and motivation of this paper.Design/methodology/approachData from the World Bank Enterprise Survey (WBES) and the Global Terrorism Database (GTD) were used for this study. The baseline analysis was estimated using the pooled ordinary least squares regression technique. For robustness checks, the fixed effects technique was used to control for heterogeneity across the authors' sample of firms and unobserved factors that are time-invariant, while the IV technique was employed to control for any potential endogeneity.FindingsThe results obtained from the regression analysis were robust to different econometric estimations and approaches. Terrorism was found to have a consistent and significant negative impact on firm financial performance. Furthermore, the marginal effect of terrorism on firm performance was more substantial when state-level terrorism data were used.Originality/valueStudies often focus on the impact of political instability (which is a measure subjectively based on perception) on foreign direct investment or on the activities of multinational corporations. The authors' research is new in supplying evidence of the relationship between terrorism (an objective measure) and the financial performance of manufacturing firms in Nigeria. Methodologically, this study also employed spatially distributed incidents of terrorism within the country. This is because incidents of terrorism are often spatially distributed within a country (i.e. province or state). This will provide new evidence of the effects of within-country variations of terrorism on firm financial performance.

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A Comparative Analysis of the Determinants of Foreign Direct Investment: The Case of Top Ten Recipients of Foreign Direct Investment in Africa

Adelakun,

Ogujiuba

2023

Economies

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Through mechanisms including knowledge transfer and productivity spillovers, foreign direct investment (FDI) is viewed as a critical driver of growth in developing economies. However, the majority of African nations require capital inflows, particularly foreign direct investment (FDI), as a result of insufficient capital accumulation. The capacity of African governments to deliver top-notch infrastructure and social services has been diminished as a result. However, there has not been any independent research on how FDI inflows have affected Africa’s top 10 nations between 1970 and 2021. Most studies on the subject overlooked the impact of institutional quality on FDI inflows and omitted pertinent indicators of infrastructure development. The purpose of this article is to present a comparative analysis of the factors influencing the top ten beneficiaries of FDI in Africa. The ARDL bound test was employed to confirm the co-integration of the variables over the long term. The major goal is to confirm the relationship between the short- and long-term determinants of foreign direct investment in the top ten African recipients. This estimation was performed based on the unique characteristics of each country to make comparisons and inferences easier. The results of the limit test demonstrated the existence of a long-term connection between the examined determinants. The study found that infrastructure gaps, poor domestic savings, and price inflation were some of the mitigating factors preventing FDI from entering these countries. Additionally, the study found poor governance, which may impede the growth of effective institutions and capital inflows. It is crucial that these nations undertake both fiscal and monetary policies in order to address these issues, draw in private investments that allow for significant economic activity, and boost their economies’ prosperity.

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Effects of the Determinants of Foreign Direct Investment in Nigeria: Error Correction Mechanism

Cited by 4 publications

References 9 publications

Foreign Direct Investment and Military Expenditure in the Face of Terrorism: Evidence from Sub-Saharan Africa.

Foreign Direct Investment and Military Expenditure in the Face of Terrorism: Evidence from Sub-Saharan Africa.

Empirical evidence of the relationship between terrorism and firm financial performance in Nigeria

A Comparative Analysis of the Determinants of Foreign Direct Investment: The Case of Top Ten Recipients of Foreign Direct Investment in Africa

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