Abstract
This study evaluated the extent to which Foreign Direct Investment (FDI) has contributed to the Gross Domestic Product (GDP) in Nigeria from 2000 to 2017. In the course of this study, three hypotheses were formulated in line with the objectives of the study. Ex-Post Facto research design was employed for the study. Regression analysis technique was adopted with the aid of E-view version 9.0 in testing the hypotheses. The study revealed that foreign direct investment on financial sector has positive and significantly affected Gross Domestic Product in Nigeria. It also showed that Foreign Direct Investment on oil sector has positive and significantly affected Gross Domestic Product in Nigeria. Another finding is that Foreign Direct Investment on non-oil sector has positive and significantly affected Gross Domestic Product in Nigeria. the study therefore conclude that inflow of FDI into the Nigerian economy for the stipulated period this research was carried out (2000-2017), showed that FDI was a major contributor to economic growth of the nation Based on the findings, the researcher recommended among other things that Policy makers should devise strategies to increase the FDI on financial sector and offer incentive for long investing and listing on the stock market so that the main objective of the government to stimulate growth will be fulfilled.
Highlights
The importance of foreign direct investment (FDI) in the economies of third world nations like Nigeria is to promote growth and development in the host country
Related research and studies reveals that foreign investment has been characterized as the best form of foreign finance because their package consist of finance, technology, high skilled personnel etc and that multinational corporations are highly adaptive social agents and the degree to which they can help in improving economic activities through foreign direct investment will be heavily influenced by the policy choice of the host country
The findings is in line with Saibu and Keke (2014); Makki and Somwaru (2004); Umoh, Jacob and Chuku (2012), whose studies shows that foreign direct investment and trade contribute toward advancing economic growth in developing countries and that foreign direct investment is often the main channel through which advanced technology is transferred to developing countries
Summary
The importance of foreign direct investment (FDI) in the economies of third world nations like Nigeria is to promote growth and development in the host country This is important because according to the International Monetary Fund, FDI promotes growth and economic development by transferring technology, skills and innovation [1]. FDI helps developing countries in supplementing their domestic savings by making available capital from overseas which is very important because domestic capital markets in such countries are usually inadequate for the financing of the corporate sector [3]. Recognizing these benefits, developing countries have generally eased restrictions on FDI since the early 1980s. Burridge, and Sinclair found a two-way relationship between FDI and economic growth [8]
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