The Relationship between Foreign Portfolio Investment, Foreign Direct Investment and Economic Performance of Nigerian Economy: (1980-2017): An Empirical Analysis

Ekine,D.I, Ewubare,Ajie, Charity,Dennis Brown

doi:10.33642/ijbass.v5n7p8

Abstract

The study examined the impact of foreign portfolio investment and Foreign Direct Investment on the performance of the Nigerian Economy over a period of 1980-2017. The data used were purely secondary sourced from the central Bank of Nigeria statistical Bulletin and World Bank Development indicator. The ordinary least square (OLS) regression analysis was used. The findings revealed that the performance of the Nigerian Economy is directly related to inflow of foreign portfolio investment and foreign direct investment and it is also statistically significant at 5% level. This means that a good performance of the economy depends on the inflow of these variables, or that the variables serve as an engine of economic growth. The study therefore recommends that policy makers should work on improvement of economic incentives capable of mobilizing external resources to the country to engender macroeconomic stability. A stable economy will attract foreign investment and this result to increased inflow of foreign capital.

Highlights

One of the most salient features of today’s globalization drives is the conscious effort of the government to encourage cross border investments
4.0 Data Presentation, Results and Discussion 4.1 Data Presentation The time series data on real GDP, per capital Gross Domestic Product (PCG) foreign Direct Investment, Foreign Portfolio Investment, Official Development Assistance employed I the model are presented in table 1
It is clear that there is a positive relationship between foreign portfolio investment (FPI), Foreign Direct Investment (FDI) and the performance of the Nigerian economy(RGDP).The result was positive but statistically insignificant

Summary

Introduction

One of the most salient features of today’s globalization drives is the conscious effort of the government to encourage cross border investments. Developing countries see attracting foreign portfolio investment as an important strategy for improving their economic wellbeing This is probably because foreign portfolio investment is believed to be sources of capital inflow that will assist the country in its effort to economic development. The main arguments in this direction are that if these countries gain access to world financial markets and other donor countries, financing the saving-investment gap would be overcome by financing domestic investment out of the savings from high-income countries. These capital imports can take the form of concessional lending abroad

Results

Discussion

Conclusion