EXTERNAL FINANCING AND INVESTMENT IN FIRMS IN NIGERIA

Abstract

The study examined the relationship between external financing and investment in firms in Nigeria for the duration of 1990-2019. In order to achieve the main objective of the study, investment in firms which is the dependent variable was proxy with Industrial Growth (INDG) while the external financing as the independent variable was measure with External Debt Stock (EDS), Foreign Direct Investment (FDI), Official Development Assistance (ODA) and Foreign Portfolio Investment (FPI). This study made use of Ex-post facto research design and secondary source of data (time series data), from the CBN statistical bulletin and Annual Report for the period 1990-2019. The study adopted a number of techniques of data analysis such as descriptive statistics, correlation and multiple regression tool of analysis with the aid of E-VIEW 9.0 statistical package was used to analyze the data because this technique was used in order to establish the kind of relationship that exists between the independent variables and the dependent variable used in the study. The findings revealed that EDS, FDI, ODA has significant effect on INDG in Nigeria while FPI does not have significant effect on INDG in Nigeria. Thus, the study concluded that external financing significant influence on investment in firms in Nigeria. The study therefore recommends that, the channels of full implementation of external financing needs to be pursued vigorously through government institutions to ensure that funds meant for investment in infrastructures and firms are not diverted to other uses.
 Keywords: External Financing, Industrial Growth, External Debt Stock and Foreign Direct Investment, Official Development Assistance and Foreign Portfolio Investment.