Foreign direct investment and economic growth in Nigeria: a granger causality test

2010 ◽  
Vol 7 (2) ◽  
Author(s):  
S Edoumiekumo
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Granger Causality ◽  
Direct Investment ◽  
Granger Causality Test ◽  
Causality Test

scholarly journals Impact of Foreign Direct Investment on Economic Growth of Nepal

2019 ◽  
Vol 33 (2) ◽  
pp. 73-80
Author(s):  
Shiva Prasad Pokharel ◽  
Bishnu Prasad Pokharel
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Gross Domestic Product ◽  
Granger Causality ◽  
Unit Root ◽  
Direct Investment ◽  
Unit Root Test ◽  
Granger Causality Test ◽  
Capital Formation ◽  
Causality Test

 This paper aims to investigate the impact of Foreign Direct Investment (FDI) on the economic growth of Nepal for the period 2008/09 to 2017/18 A.D. yearly data. It evaluated the Gross Domestic Product (GDP) performance and the trends of FDI and Gross Fix Capital Formation (GFCF) in Nepal. To demonstrate the relationship between Nepalese Gross Domestic Product (GDP) and Foreign Direct Investment (FDI) and Gross Fix Capital Formation (GFCF) Multiple-Regression-Model has been applied along with various econometrics techniques such as Unit-Root Test, Granger-Causality Test and Ordinary Least Square (OLS). GDP in this model is used as dependent variable whereas FDI and GFCF are measured as independent variables. According to the results, Unit Root Test indicated that all the variables included in the model were not stationary at level except FDI, whereas GDP and GFCF are stationary at first difference. The model is overall significant with the positive and significant relationship of GDP, FDI and GFCF. Result also indicate a good fit for the model with R2=86%. The Granger Causality Test revealed that there was no causality between the variables since all p-value obtained are more than 5%. Based on the empirical result of this paper, policy recommendation proposed that for Nepal to generate more foreign direct investment, hard work should be made at solving problems of government involvement in business; relative closed economy; corruption; weak public institutions; and poor external image, and political instability.

scholarly journals Effect of Foreign Direct Investment on Bangladesh Economy: a Time Series Analysis from 1972 to 2013

2020 ◽  
Author(s):  
Rumana Rashid ◽  
Sk. Sharafat Hossen
Keyword(s):  
Economic Growth ◽  
Time Series ◽  
Foreign Direct Investment ◽  
Granger Causality ◽  
Direct Investment ◽  
Export Performance ◽  
Granger Causality Test ◽  
Causality Test ◽  
Long Run ◽  
The Impact

This study investigates the impact of Foreign Direct Investment (FDI) on economic growth and examines the causality between FDI and economic growth in Bangladesh during 1972-2013. Gross Domestic Product (GDP), export performance (EXP), Foreign Direct Investment (FDI), and Gross Fixed Capital Formation (GFCF) are considered to capture the objective of the study. The study methodology includes some systematic steps. As the data used in the study is time-series in nature, the author employs unit root tests, and in this case, Augmented Dickey-Fuller (ADF) and Phillips-Perron (PP) tests are used. Then Johansen’s cointegration test, Granger causality test, regression with Newey-West Standard Error and Vector Error Correction Model (VECM) are applied. By using the ADF and PP test the study reveals that the variables of four-time series are integrated of I (1) i.e. they are stationary at first difference. Regression analysis result demonstrates that FDI has a positive effect on economic growth. The Granger Causality test discloses that there is a unidirectional relationship between FDI and economic growth. But the VECM estimation finds that in the long run FDI negatively affects economic growth.

scholarly journals Foreign Direct Investment, Trade Openness, Government Expenditure and Economic Growth in Asian-African Conference Countries, 2000-2014

2016 ◽  
Vol 1 (1) ◽  
pp. 09-16
Author(s):  
Malik Cahyadin
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Granger Causality ◽  
Direct Investment ◽  
Trade Openness ◽  
Government Expenditure ◽  
Granger Causality Test ◽  
Test Results ◽  
African Countries ◽  
Causality Test

Objective - This study analyses the relationship between FDI, TO, GE and EG based on data collected from 79 member countries of the AAC. Today, the AAC has becomes an urgent forum for member countries as it strives to manifest the economic development and prosperity of Asian and African countries. Methodology/Technique - This study uses correlation and the Granger Causality test to analyse data which were extracted from the World Bank database during the period of between 2000– 2014. Findings - The test results showed that the correlation of FDI, TO, GE may be correlated weakly, moderately, and strongly against EG. However, the Granger Causality test results indicated that not all variables have causality. In that regard, member countries of the AAC should pay more attention towards promoting economic growth through FDI, TO and GE. Novelty - The findings of this study can be used by policy makers and economists in the respective member countries of the AAC to design an economic strategy that encourages domestic economic growth. Type of Paper: Empirical/Review Keywords: Macroeconomy, AAC, Correlation, Causality test, Foreign Direct Investment, Trade Openness, Government Expenditure, Economic Growth.

scholarly journals The Causal Nexus Between Foreign Direct Investment and Economic Growth in Indonesia: An Autoregressive Distributed Lag Bounds Testing Approach

2021 ◽  
Author(s):  
Olivia Tanaya ◽  
Suyanto Suyanto
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Granger Causality ◽  
Direct Investment ◽  
Granger Causality Test ◽  
Bounds Testing ◽  
Causality Test ◽  
Distributed Lag ◽  
Short Run ◽  
Causal Nexus

The nexus between foreign direct investment and economic growth has long been among the most debated issues in macroeconomics. Some studies find a positive link between the two factors, but others find no evidence. This current research fills the gap by analysing the causal nexus between foreign direct investment and economic growth in Indonesia for the period 1970-2018. Indonesia as a developing country is one of the largest recipients of FDI flow; hence the study on the impact of FDI on the economic growth is very much important. This current research employs a contemporary time-series procedure, involving several unit-root tests namely Augmented-Dickey-Fuller (ADF), Phillips-Perron (PP), Kwiatkowski-Phillips-Schmidt-Shin (KPSS), and Lee-Strazicich (LS), an Auto-Regressive-Distributed-Lag (ARDL) bounds-testing method for cointegration, and Granger causality test. The findings provide evidence of long-run and short-run causal direction from GDP to FDI. In contrast, FDI generates only a short-run relationship on GDP. The Granger causality test confirms the finding in ARDL that there is a unidirectional causality running from GDP to FDI.

scholarly journals The nexus between foreign direct investment and environmental sustainability in North Africa

2018 ◽  
Vol 9 (1) ◽  
pp. 57-68
Author(s):  
Marwa Lazreg ◽  
Ezzeddine Zouari
Keyword(s):  
Foreign Direct Investment ◽  
Granger Causality ◽  
Co2 Emissions ◽  
Direct Investment ◽  
Granger Causality Test ◽  
North African ◽  
African Countries ◽  
Causality Test ◽  
The North ◽  
North African Countries

This paper provides a study of the relationship between sustainable development and foreign direct investment (FDI) from an empirical point of view in the case of the North African countries during the period from 1985 to 2005. We use the cointegration test, the FMOLS (Fully Modified Ordinary Least Squares) model and the Granger causality test to examine this relationship. According to the empirical results, we confirm the existence of a cointegration relationship between the different series studied in this paper. Based on the cointegration test we can use the error correction model. Also, to test the effect of FDI on sustainable development in the North African countries, we make an estimate by FMOLS method. We found that the foreign direct investment has a positive impact on CO2 emissions. Also, the Granger Causality test confirms the presence of a bidirectional relationship between FDI and CO2 emissions (Carbon dioxide). That is to say, the FDI can cause CO2 emissions and CO2 emissions can cause FDI based on the Granger causality.

scholarly journals Investigating the Relationship between Unemployment and Inflation in Nigeria

2021 ◽  
Vol 04 (03) ◽  
Author(s):  
Charity I. Anoke I. Anoke ◽  
Keyword(s):  
Foreign Direct Investment ◽  
Granger Causality ◽  
Direct Investment ◽  
Economic Status ◽  
Government Expenditure ◽  
Negative Relationship ◽  
Granger Causality Test ◽  
Causality Test ◽  
Long Run ◽  
The Impact

This study considered the impact of inflation on unemployment in Nigeria viz avis selected macroeconomic variables. The researcher adopted co integration, vector error correction model and VEC Granger causality test econometric procedure in the analysis of the data employed. The specific objectives of the study are; (i) to determine the extent to which inflation impact on unemployment in Nigeria within the period of study, (ii) to examine if government expenditure have any significant impact on unemployment in Nigeria within the period of study, (iii) to estimate the significant impact of foreign direct investment on unemployment in Nigeria within the period of study; (iv) to investigate the extent of direction of causality between unemployment and inflation in Nigeria within the period of study. The results of the research revealed long run relationship among estimated variables, VECM result showed a positive significant relationship between inflation and unemployment in the short run and long run, government expenditure and foreign direct investment maintained negative relationship with unemployment both in the short and long run. The VEC Granger causality test indicated causality among UNEM, INF and TGEX. The research recommended that (i) government should focus on policy and strategy that can attract foreign direct investment into the country, (ii) government should try to maintain low inflation rate through suitable monetary policy; (iii) government should encourage investment platforms and enabling environment for effective and efficient national output; and (iv) Government should consciously increase fiscal space for capital activities and projects that are capable of generating income, increase domestic and public spending, improve economic status and reduce unemployment. This paper concluded that the Philip’s curve hypothesis does not apply in Nigeria within the period of study as the result failed to establish an inverse relationship as postulated by A.W. Philips.

scholarly journals Foreign Direct Investment, Economic Growth, and Environmental Concern: Evidence from Nigeria

2013 ◽  
Vol 5 (7) ◽  
pp. 460-468
Author(s):  
Jonathan D. Danladi
Keyword(s):  
Economic Growth ◽  
Growth Rate ◽  
Foreign Direct Investment ◽  
Host Country ◽  
Direct Investment ◽  
Environmental Concern ◽  
Granger Causality Test ◽  
Multinational Companies ◽  
Causality Test ◽  
Growth Economic

One of the reasons pointed out, as the major cause of low investment in Nigeria is low saving. To bridge the saving-investment gap, there have been calls for inflow of foreign direct investment into the country. However, there are arguments about the impacts of FDI on the host country. Principal among the various arguments is its effect on environmental degradation .This paper sets out to examine the validity of this perception using Granger causality test. It examines the direction of causality between FDI and economic growth, Economic growth and Pollution, FDI and Pollution. The results revealed that there is no causality between the growth rate of GDP and FDI, growth rate of GDP and Co 2. The only causality found is a unidirectional causality between the growths of FDI grows and the growth rate of pollution. The direction is from growth rate of FDI to the growth rate of pollution. This paper concludes that government should make policy that will ensure that multinational companies use equipment that is environmentally friendly.

Dynamics of Economic Growth, Investment and Trade Openness: Evidence from Bangladesh

2017 ◽  
Vol 6 (1) ◽  
pp. 82-104 ◽  
Author(s):  
Champa Bati Dutta ◽  
Mohammed Ziaul Haider ◽  
Debasish Kumar Das
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Granger Causality ◽  
Direct Investment ◽  
Trade Openness ◽  
Jel Classification ◽  
Domestic Investment ◽  
Causality Test ◽  
Vector Error Correction ◽  
Causality Tests

This article investigates the causal relationship among foreign direct investment, domestic investment, trade openness and economic growth in Bangladesh over the period 1976–2014. Unit root tests, cointegration methods and Granger causality tests in Vector Error Correction Model (VECM) framework are used to investigate the relationships. The results of Granger causality test based on a stable VECM support a unidirectional causality running from foreign direct investment to growth, domestic investment to trade openness, growth to trade openness and bidirectional causality between domestic investment and growth and foreign direct investment and domestic investment. The results support the investment complementarities in Bangladesh. JEL Classification: E22, F1, O40

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