Drivers of Foreign Private Investment Inflows in Emerging Market: Evidence from Nigeria

  • Oluwatobi Omolaja Fagbola University of Lagos
  • Dr. Oke University of Lagos
  • Prof. Adegbite University of Lagos
Keywords: ARDL; FDI; FPI; domestic savings and macroeconomic policy

Abstract

In the globalized world with intense competition, emerging markets have attempted to attract more foreign private capital to bridge the dual gap and ultimately achieve their developmental goals. Against this backdrop, it has become imperative to ascertain the drivers of these inflows. This study advances the international private capital flows literature by empirically identifying the drivers of both foreign direct investment (FDI) and foreign private investment (FPI) inflows in Nigeria between 1986 and 2017. To achieve this objective, we employed ARDL bounds test for cointegration. The estimated model revealed counts of the number of significant push and pull factors influencing the flows of FDI to Nigeria in the short run. The findings further revealed that country-specific factors seem to be much more important than global factors in explaining the dynamics of FPI inflows to Nigeria both in the short-run and long-run. The policy inference of this study is that Nigerian policymakers should embrace a more open approach to international economic integration, combined with a proactive macroeconomic policy measure to managing the risks associated with volatile foreign private capital flows.

Author Biographies

Dr. Oke, University of Lagos

Associate Professor

Department of Finance

University of Lagos

Nigeria

Prof. Adegbite, University of Lagos

Professor of Finance

Head of Department

Department of Finance

University of Lagos

Nigeria

 

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Published
2020-10-08
Section
Economic Development, Technological Change, and Growth