Foreign Direct Investment and Economic Output in Nigeria (1984-2019)

Abstract

Most developing nations need foreign support in order to fill their infrastructural gap. This is also true for Nigeria. One major source of foreign inflow is the Foreign Direct Investment (FDI). This study examines the impact of FDI on economic output, measured by real GDP, in Nigeria while accounting for the moderating impact of Inflation Rate (INFR), Interest Rate (INTR) and Exchange Rate (EXR). Using Autoregressive Distributed Lag (ARDL) Model, the findings suggest that FDI have a significant positive impact on real GDP only at one period lag. The study recommends that government should encourage FDI inflow for long term project in order for its benefit to be maximized in Nigeria.