Impact of Macroeconomic Variables on Foreign Direct Investment Flow in Nigeria: ARDL Model

Primus E. Emenuga

Impact of Macroeconomic Variables on Foreign Direct Investment Flow in Nigeria: ARDL Model

African Journal of Accounting and Financial Research

Vol. 2Issue 12019pp. 1–10Published 7 February 2019

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Abstract:

The study examined the impact of macroeconomic variables on foreign direct investment flow in Nigeria from 1986 to 2017. Data on foreign direct investment (FDI), gross domestic product (GDP), government size (GOVT), exchange rate (EXR), inflation rate (INF) and interest rate (INT) were sourced from CBN Annual report. ARDL cointegration bound test and error correction model estimation techniques were employed. The finding of the ARDL revealed that exchange rate, interest rate, gross domestic product and government size were all significantly related to foreign direct investment in Nigeria. The study concluded that there exists a long-run relationship between macro-economic variables and foreign direct investment in Nigeria and recommended that The Nigerian government should foster economic policy capable of attracting more foreign direct investment into the country.

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