Abstract
The study examined the impact of Foreign Direct Investment (FDI) on the stock market performances in Nigeria, from 1985 – 2014. The secondary data used were collected from IMF, International Financial Statistics (2015), CBN Statistical Books (2015). Multiple regression of least square estimation was the tool used to analyze the data in this study. In the model, the FDI was regressed on RGDP, Consumer Price Index, Real effective exchange rate, Money supply (M2), Share price index, Treasury bill, Nigerian stock exchange transactions. The study revealed that FDI has an insignificant and negative impact on the economy and the macroeconomic variables that determine the performances of the Nigerian stock market. The paper therefore recommends policies that would encourage foreign firms operating in the oil and gas including the telecommunication and agricultural sectors to be listed since it would go a long way in attracting more FDI, leading to improvement in the stock market performances.
Highlights
Foreign Direct Investment are the net inflows of investment to acquire a lasting management interest (10 percent or more of voting stock) in an enterprise operating in an economy other than that of the investor
The sources of data were from such areas as: (i) International Monetary Fund (IMF) World Economic Outlook Database; (ii) International Financial Statistics; (iii) Nigerian Stock Exchange Bulletin; (iv) CBN annual reports, Economic and Financial review; (v) CBN bulletin; (vi) National Bureaus of statistics
The main objective of this study is to investigate the impact of Foreign Direct Investment (FDI) on Nigerian stock market performances from 1985 to 2014
Summary
Foreign Direct Investment are the net inflows of investment to acquire a lasting management interest (10 percent or more of voting stock) in an enterprise operating in an economy other than that of the investor It is the sum of equity capital, reinvestment of earnings, other long-term capital, and short-term capital as shown in the balance of payments. Especially stock markets, have grown considerably in developed and developing countries over the last two decades this is as a result of rapid financial and political transformation To increase their share of FDI flows, most of the countries easy restrictions on FDI, strengthened macro stability, privatization of state-owned enterprises, domestic financial reforms, capital account liberalization, tax incentives and subsidies have been instituted. We call an investor to be bullish when his perceptions about the market and the economy are positive, i.e., he is expecting further rise in prices, and
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