Effect Of Macro Economics Factors On Foreign Direct Investment (Fdi) In Nigeria

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Effect of Macro Economics Factors on Foreign Direct Investment (FDI) in Nigeria



This research study is conducted to examine the effect of macro economics factors on foreign direct investment in Nigeria. To accomplish this aim there is a need to carry out the statistical test for the relationship analysis among FDI, unemployment rates, exports, inflation and GDP. The Quantitative research design is the most appropriate research design for this research study.




Background of the Study1

Problem Statement2

Aims and Objectives of the Study2

Research Questions3

Research Hypothesis3


Determinants of Foreign Direct Investments4

Operational definitions of Foreign Direct Investments5

Nigeria and FDI6

FDI and Multinational Corporations7



Research Design9

Variables of the Study9

Dependent Variables9

Independent Variables9

Data Collection10

Data Analysis10



Background of the Study

With the worldwide growth of foreign direct investment the international trade flow is also increasing. It has an influential impact on the economy of the country. In 1998 the United Nations Conference on Trade and Development (UNCTAD) indicated that the estimated sales of foreign affiliates are €11.0 trillion which surpassed the world trade estimated total of €7.0 trillion. Over the past 50 years the participation of African countries in global economy has declined, both in terms of its gross domestic product (GDP), its exports its influx of international investment. During the 20th century the only area in which African countries get prospered is its population growth. Along with this population growth and weak economic infrastructure the African countries are facing a number of problems.

In economic terms, the share of Africa in world gross domestic product expressed parity purchasing power has declined between 1950 and 2000 (Ibrahim and Omoniyi 2009, pp. 58). The share of African countries in world exports is also declined. Thus, the low growth in African countries as compared to the rest of the world can it even explain the decrease of its ratio in world trade. In addition, the processing capacity in export is more difficult Africa than in the rest of the world because of weaknesses in the chain of marketing and transportation (Huang 2007, pp. 28).

To overcome the problems the African countries have reformed their economic policy. In order to develop the financial system of the country, in the present era the African countries begin to highly invest in foreign direct investment. According to previous research studies the effect of foreign direct investment on a number of macro economic variables receiving FDI has been discussed. Some of the researchers indicated that there is an impact of FDI on a number of macro economic factors such as economic growth, imports and exports, technology transfer, and human capital (Goodspeed et al., 2010, pp. 84). There were also some of the researchers who indicated that FDI have a strong impact in improving a number of economic variables in host countries. This research study is conducted to carry out an in-depth analysis of impact of FDI on macroeconomic variables such as unemployment rates and exports of Nigeria.

Problem Statement

Nigeria is poor in terms of income but rich ...
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