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Asymmetric evidence of foreign direct investment response to stock returns in Nigeria

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  • Joel Ede Owuru

    (Augustine University, Ilara-Epe)

  • Olumuyiwa Samuel Oladele

    (Augustine University, Ilara-Epe)

Abstract

This study examines the response of foreign direct investment (FDI) to asymmetric changes in stock returns in Nigeria. We employed disaggregated monthly data for Nigeria (1985M01–2017M12) to test the magnitude of stock returns’ elasticity of FDI using a nonlinear ARDL modelling framework. By controlling for exchange rate and output size, evidence of asymmetric response of FDI to stock market returns in Nigeria could not be denied. Hence, sustainable development in Nigeria requires a long-run balance between FDI and Stock market through a stable exchange rate management system and efficiency of the capital market is necessary for increased FDI.

Suggested Citation

  • Joel Ede Owuru & Olumuyiwa Samuel Oladele, 2023. "Asymmetric evidence of foreign direct investment response to stock returns in Nigeria," Future Business Journal, Springer, vol. 9(1), pages 1-14, December.
  • Handle: RePEc:spr:futbus:v:9:y:2023:i:1:d:10.1186_s43093-023-00194-4
    DOI: 10.1186/s43093-023-00194-4
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    References listed on IDEAS

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    More about this item

    Keywords

    Foreign direct investment; Stock returns; Nonlinear autoregressive distributed lag;
    All these keywords.

    JEL classification:

    • C50 - Mathematical and Quantitative Methods - - Econometric Modeling - - - General
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions

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