Opportunities and challenges of foreign direct investment utilisation and its impact on construction sector in developing countries

Abstract

Purpose -Foreign direct investment (FDI) inflows to both developed and developing countries have increased over the past three decades. However, investigation of opportunities and challenges associated with FDI on the host economy and its impact especially on the construction sector through empirical assessment, have received scant attention. The purpose of this study is to address this gap in knowledge within the Nigerian context; and examine the trend of FDI inflows to the construction sector for the period 2000-2013 inclusive. Relationships between contributions of the construction sector to Nigeria's Gross Domestic Product (GDP) are also studied.Design/methodology/approach-The study adopted used a literature review, a questionnaire survey, and archival data culminated in data analysis. The survey targeted financial experts in Nigerian financial institutions/local banks. Archival data included the annualised data extracted from the Central Bank of Nigeria (CBN) statistical bulletins. The period examined witnessed stable economic conditions. Data collected were analysed using mean score, factor analysis, and correlation.Findings -Eight identified opportunities of utilising FDI were grouped into three principal factors: knowledge spillovers; capital for new investment; and resilience during financial crises. The 10 identified FDI challenges were grouped into three major factors: loss of ownership advantage and additional costs; crowding-out of national firms; and administrative bottlenecks and overdependence. Based on the hypotheses tested, the study found a significant relationship between the contributions of FDI inflows in the construction sector and the total GDP of the host country.Practical implications -This study provides greater insight on the effects of FDI on a host economy in developing countries, which would help policymakers to examine existing policies, and look for new ways of increasing foreign investment flow,. eEspecially in the area of Construction Facility Investment (CFI).Originality/value -This study is important because it would enable informs policymakers in developing countries at large, to promote FDI with special considerations for the construction sector of the economy.

Mitigating Strategies of Threats to Quantity Surveying Profession in The Nigerian Construction Industry

“…The choice of factor analysis was to group the 12 mitigating strategies into concise form for ease of discussion. This method of analysis was also adopted by Babatunde et al (2018) to group 8 factors in a study to facilitate easy discussion. This analysis was employed to explore and detect underlying relationships among the variables and describe them in fewer but in a more concise and comprehensive form.…”

Reducing the social risks of transnational railway construction: a discussion on the formation mechanism of host country people's coping behaviors

“…Finally, while internal stakeholders recognize that there may also be ulterior motives for the investment of the country of origin, they are much more cognizant of the benefits of the technologies that the country of origin would bring and development of the host country's construction industry as well pointed out by other previous research studies (Sacilotto and Loosemore, 2018; Babatunde et al , 2018). The public, as an external stakeholder, pays more attention to motivations of country-of-origin's controlling interests and its own emotions.…”

Characterisation of the drivers of environmental management system implementation

“…This is above the minimum ratio required, i.e., 1:5 for conducting factor analysis (Pallant, 2020). The choice of factor analysis was to group the drivers of EMS implementation into a manageable size that adequately represents the observed variables to facilitate easy discussion and decision making (Babatunde et al, 2018;Reio Jr and Shuck, 2015).…”