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Foreign Direct Investment And Inclusive Growth: The Role Of The Financial Sector Development In Nigeria, 1981-2020

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  • Emeka NKORO, Aham
  • Kelvin UKO

Abstract

This study examined the role of the domestic financial sector development in the relationship between foreign direct investment (FDI) inflows and inclusive growth in Nigeria over the period 1981-2020 using annual time series. Empirically, the result revealed that the FDI exerted a significant positive effect on inclusive growth when the domestic financial sector has reached a certain minimum level of development. The result further showed that the FDI alone presents a significant negative effect on inclusive growth. This is evidence that the domestic financial sector development is a pre-condition for FDI to effectively promote inclusive growth in Nigeria.

Suggested Citation

  • Emeka NKORO, Aham & Kelvin UKO, 2023. "Foreign Direct Investment And Inclusive Growth: The Role Of The Financial Sector Development In Nigeria, 1981-2020," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 23(1), pages 77-100.
    • Handle: RePEc:eaa:aeinde:v:23:y:2023:i:1_4
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    More about this item

    Keywords

    Inclusive Growth; Foreign Direct Investment; Financial Sector Development; Threshold Level; ARDL Approach; Time series; Nigeria.;
    All these keywords.

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean

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