FOREIGN DIRECT INVESTMENT A CURSE OR BLESSING TO THE NIGERIAN  ECONOMY: EVIDENCE FROM AN AUTOREGRESSIVE DISTRIBUTED LAG  MODEL.

Authors

Economic Growth, Foreign Direct Investment, Auto Regressive Distributed Lag Model, Error Correction Model and Trade Openness.

The study tested the argument on whether foreign direct investment inflow is a curse or

blessing to the Nigerian economy between the period of 1981 and 2019. Real annual growth

of real GDP was used as a proxy for economic growth while foreign direct investment

inflows as a percentage of GDP was used as a proxy for foreign direct investment. Other

control variables were included in the model. All the series were subjected to a stationarity

test using the Augmented Dickey Fuller approach. The results indicated that the series in the

model are integrated in different order meaning a mixture of I(0) and I(1). The finding from

the Bounds co-integration test indicated strong evidence of a long-run relationship between

foreign direct investment and economic growth in Nigeria. Also, in the long-run foreign

direct investment is a curse to the Nigerian economy. Thus, the study concluded that Nigeria

needs a minimum threshold of human capital and financial development needed where

foreign direct investment inflows can leverage on and translate to economic growth.

Therefore, the study strongly recommended that critical financial and economic analysis

should be done in the area of foreign direct investment to avoid inflows of capital that can

hamper the Nigerian economy.