LATEST GLOBAL FINANCIAL CRISIS AND FOREIGN DIRECT INVESTMENT FLOWS IN NIGERIA: THE ROLE OF MARKET SIZE

LATEST GLOBAL FINANCIAL CRISIS AND FOREIGN DIRECT INVESTMENT FLOWS IN NIGERIA: THE ROLE OF MARKET SIZE

Author by Dr. Adegbemi Onakoya

Journal/Publisher: Babcock Journal Of Econmics

Volume/Edition: 6

Language: English

Pages: 39 - 49

Abstract

While there is substantial empirical evidence suggesting that the heightened market apprehension caused by the latest global financial crisis (GFC) resulted in a substantially reduced foreign direct investment (FDI) in many developed and emerging economies, the assertion that developing economies such as Nigeria are insulated from the impact of recent global financial crisis is however not evidence-based. This study therefore deployed the least squares technique to evaluate the effect of the crisis on FDI into the country. The results showed that FDI inflow to Nigeria was not significantly influenced by the recent global financial crisis. The variation in the FDI inflow to Nigeria was due largely to the country’s market size and macroeconomic stability. This study recommended further diversification of the economic base of the country in order to enhance its capacity to withstand possible shocks induced by future global crisis.


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