Journal of Finance and Investment Analysis

Impact of Economic Reforms on Foreign Direct Investment (FDI) in Nigeria (1980-2012)

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  • Abstract

    The central idea of this paper is to examine the effects of economic reforms on FDI by modeling the relationship between FDI and some economic indicators. The trend of FDI between 1980 and 2012 was examined and comparative analysis of the FDI before and after the reforms was undertaken. Multiple linear regression was employed for modeling the relationship and the test of test of significance revealed that interest rate, X1 and consumer price index, X2 were significant in their contributions to FDI. It was further observed that the trend of FDI over the period was nonlinear, with upward and downward shocks at certain period. The result of the t-test comparing the pre- and post- reform FDI showed that there was no significant difference between them. It was concluded that if policy measures were intensified around the two variables having significant contributions, there will be appreciable increase in FDI.