...Vol. 4, No. 8 ISSN: 2222-6990 234 www.hrmars.com Impact of Foreign Direct Investment on Nigeria Economic Growth Adeleke Kunle M. Department of accountancy Federal Polytechnic, Offa, Kwara State, Nigeria Olowe S.O Department of accountancy Osun State College of Technology, Esa-Oke, Nigeria Fasesin Oladipo Oluwafolakemi Department of Accountancy Osun State Polytechnic, Iree, Nigeria DOI: 10.6007/IJARBSS/v4-i8/1092 URL: http://dx.doi.org/10.6007/IJARBSS/v4-i8/1092 Abstract The study analyzed the impact of foreign direct investment on Nigeria economic growth over the period of 1999- 2013. The main type of data used in this study is secondary; sourced from various publications of Central Bank of Nigeria, such as; Statistical Bulletin, Annual Reports and Statement of Accounts. The regression analysis of the ordinary least square (OLS) is the estimation technique that is being employed in this study to determine the relationship between and impact of the Direct Foreign Investment on economic growth. The findings revealed that economic growth is directly related to inflow of foreign direct investment and it is also statistical significant at 5% level which implies that a good performance of the economy is a positive signal for inflow of foreign direct investment. This implies that foreign direct investment is an engine of economic growth. The paper recommended that government should liberalize the foreign sector in Nigeria so that all barriers to trade such as arbitrary...
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...Foreign Direct Investment and Ireland’s Tiger Economy 1) In the economic history of Ireland there have been many changes due to different governments and different policies. The reasons behind the Ireland economic success are the good location of the country, because it’s like a bridge to the European union market for the American companies, low tax, in fact there is a tax rate of 12,5 % that is the lowest in the European Union, a multilingual labor force, that is very important for the multinational enterprise and the labor cost is cheaper than other nations with the same skilled workers like Switzerland and Netherlands and to conclude a very good system of transportation and logistics to move products toward major markets in Europe easily and quickly. In the Ireland economy FDI have played a central role. I would say an essential role for the economy. The lack of the corporate sector has been an active proponent for the Ireland government to attracts FDI, in fact a large part of the Ireland GDP is product by foreign firms, for instance Google, Apple, IBM and so on; this depend on the fact that a huge part of the Ireland work force works in the foreign company. 2) How we can see from the Irish case, a lot of countries during the years started to subsidize foreign direct investments and different firms started an aggressive export oriented strategy. This was led by the large potential profits that this strategy could create: by the host country point of view in fact (as it’s...
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...1. Introduction Foreign Direct Investments (FDI) has been playing a critical role in the Sri Lankan economy since last four decades. Similar to many developing countries in the world, Sri Lanka also focuses on seeking and attracting FDI through many public policy measures due to many positive sides of FDI. FDI could be defined as an international investment made by a resident entity in one economy (Direct Investor) with the objective of establishing a long term interest in an enterprise (the direct investment enterprise) resident in another economy (N. Samarappuli& G.C.R. Tharanga, (2009). While bringing foreign capital into the country, FDI supports economic growth by transferring knowledge, technology, managerial skills and best practices and creating employment opportunities (Dharma de Silva, 2011). When considering the Sri Lankan context, with the termination of three-decades lasing civil war, Sri Lanka is moving itself towards a faster economic growth reaching the upper-middle income status. With these objectives, the importance of attracting FDI has become a high priority of the Government’s strategies. The Sri Lankan Government has been adopting very liberal FDI policy in order to encourage and attract foreign investors into the country. As per the report on “Recent Economic Developments” published by the Central Bank of Sri Lanka (CBSL), net FDI has increased to USD 368 million during the first six months of 2012, compared to USD 364 million during the corresponding...
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...Analysis of Foreign Direct Investments of North America Kristin Daughdril & William Cassidy Business Administration 418 Abstract Foreign Direct Investment (FDI) is an investment involving a long-term relationship and reflecting a lasting interest in and control by a resident entity in one economy of an enterprise resident in a different economy (UNCTAD). There are two types of FDI, inflows and outflows, which can be used to help determine the investment strategies and economies of countries engaged in FDI. North America has been the source of nearly one-half of all investment and almost three-quarters of the jobs created throughout the globe (Huggins, 442). North America is probably the most important continent when it comes to dealing with FDI. The three main countries of North America, the United States, Canada, and Mexico, all rank in the top 15 of world economies, proving them to be desirable partners in FDI transactions. The trends of FDI discussed in this report will be unparalleled to this information and can lead to some predictions on how future trends of the countries of North America will continue to be superior to that of the other continents of the world. Keywords: Foreign Direct Investment, FDI Inflow, FDI Outflow Foreign Direct Investment is investment of a company located in a different country either by buying a company in the country or expanding its business into the country. FDI can be done for many purposes. Companies may have tax incentives abroad...
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...Introduction of Foreign Direct Investment Foreign Direct Investment (FDI) is known as the long term participation by country A into country B. It usually involves participation in management, joint-venture, transfer of technology and expertise. In other words, foreign direct investment is the cross-border corporate governance mechanism through which a company gains productive assets in another country. FDI is different from other major forms of foreign investment in that it is motivated largely by the long-term profit prospects in production activities that investor directly control (Wong, 2005). Wong also says that almost most of the developing and least developed countries worldwide equally participated in the process of direct investment activities. Over a long period of time, foreign direct investment (FDI) forms a major part of investment in most industrial and some developing countries. Besides that, he did explain that some FDI is intended to utilize local natural resources. Sometimes it is to employ relatively cheap labour, and sometimes to produce goods near to markets. Moreover, foreign direct investment can be a significant driver of development in poor nations. According to Katerina, John and Athanasios (2004), it provides an inflow of foreign capital and funds, in addition to an increase in the transfer of skills, technology, and job opportunities. Furthermore, they said it would be difficult to generate this capital through domestic savings, and even if it were...
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...THE FOREIGN DIRECT INVESTMENT AND ECONOMIC GROWTH IN TURKISH ECONOMY A TERM PAPER SUBMITTED IN PARTIAL FULLFILLMENT OF THE REQUIREMENTS OF THE COURSE ECON 466 DEPARTMENT OF ECONOMICS BY VEYSEL ERDEM TORAMAN FALL, 2012 ABSTRACT This paper elaborates on the foreign direct investment and the economic growth in the Turkish economy by surveying literature and constructing empirical analysis. The Turkish economy and its brief history with foreign direct investment is analyzed following and both empirical studies and researches showed that the low and inadequate levels of foreign direct investment in Turkey has no effect on economic growth. 1. INTRODUCTION In simplest economic terms, investment is what makes the economy grow in terms of inputs of production, technology and other instruments causing the production process to occur. An in a globalized worlds of ours, the investment could be foreign or domestic whether the economy is not eligible to support their own, open to trade or highly geopolitical. Foreign investment may bring foreign currency, technology transfer, skilled labor etc. and all of those are crucial for a country to grow in both financial and real terms. In other words, in today’s world, for most of the countries, attracting and getting foreign direct investment is very important. There are economies that have almost 20-25% of their GDP’s as foreign investment. The types of this foreign investment may be direct, long term or short term. Direct investments...
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...34-42 www.researchinventy.com Role of Foreign Direct Investment in India: An Analytical Study 1 Dr. Jasbir Singh,2Ms. Sumita Chadha,3 Dr. Anupama Sharma 1 Associate Professor, Maharaja Surajmal Institute, Janakpuri, Delhi Assistant Professor, Maharaja Surajmal Institute, Janakpuri, Delhi 3 Assistant Professor, Maharaja Surajmal Institute, Janakpuri, Delhi 2 Abstract: International Economic Integration plays a vital role in Economic Development of any country. Foreign Direct Investment is one and only major instrument of attracting International Economic Integration in any economy. It serves as a link between investment and saving. Many developing countries like India, are facing the deficit of savings. This problem can be solved with the help of Foreign Direct Investment. Foreign investment helps in reducing the defect of BOP. The flow of foreign investment is a profit making industry like insurance, real estate and business services and serving as a catalyst for the growth of economy in India. The present study is based on the objectives like (a) to know the requirement of amount of foreign investment by India, for its economic Development and (b) to analyze the trend and role of FDI & FIIs in improving the quality and availability of goods has been beyond doubt. To analyze all these objectives data has been gathered through secondary sources like reports and publication of Govt. and RBI relating to foreign Investment. After analyzing all the facts it may...
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...INTERNATIONAL ECONOMICS THEMES AND ISSUES MMN222154-13- AB THE IMPACT OF FOREIGN DIRECT INVESTMENT ON ECONOMIC GROWTH IN NIGERIA BY AZUMONYE M. CHUKWUEMEKE S1344407 INTRODUCTION Over the years, the debate on the role of foreign direct investment (FDI) as a factor that induces economic growth has received the attention of policy makers, researchers and international organizations (Tumala et al, 2011). There is no denying that most countries strive to attract foreign direct investment (FD1) because of its putative advantages as a tool of economic development. Therefore, this essay seeks to ascertain the extent at which growth in foreign direct investments (FDIs) influences economic growth in Nigeria in the long-run and investigated the empirical relationship between FDI and privatization. Nigeria, after independence began with an economy that was mostly driven by the public sector. According to Tumala et al (2007), Nigerian Enterprises Promotion Decree (NEPD) of 1972 imposed several restrictions on FDI entry, thereby earning the tag „the indigenization policy‟. It reserved 22 business activities exclusively for Nigerians, including advertising, gaming, electronics manufacturing, basic manufacturing, road transport, bus and taxi services, the media and retailing and personal services. Foreign investment was permitted up to 60 per cent ownership and provided that the proposed enterprise had, based on 1972 data, share capital of N200, 000 ($300,000) or turnover...
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...Explain the term ‘investment’ and analyse two possible economic benefits for the UK when it is investing overseas. Investment is spending by firms on buildings, machinery and improving the skills of the labour force. Investment is an injection into the economy, which may cause a multiplier effect to operate so that the increase in national income is likely to be larger than the initial injection. This diagram shows how an increase in investment overseas means there wil be foregn direct investment so there will be a huge flow in capital, which will allow the economy to benefit with exchange of supply and demand. Advantages Of Foreign Direct Investment There is a huge inflow in capital, technology and openings in employment. The economy benefits with exchange of supply and demand in an international market. Foreign direct investment increases the employment in the trading countries which is a significant benefit. Imports and exports increase in both the trading countries. The quality of the product increases with a free flow of international trade. There is widespread technological advancement. There is a spill over effect of technology and quality in the existing economies. Focus on research and development increase The profits gained by foreign direct investment increases re-investment opportunities in the developing economy. Low transportation costs Avoiding trade restriction to expand into foreign markets Tax benefits Same currency converters...
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...Proposal for Effects of Foreign Direct Investment towards Economic Growth, Exchange Rate, and Management Skills in Malaysia Research Method (MKT651) Noor Azyan Syawanie Bt Abdul Ghani Nur Athirah Binti Mohamadzin Nur Aishatul Adila Binti Adnan Effects of Foreign Direct Investment towards Economic Growth in Malaysia Introduction Malaysia is a nation that has been working itself up from the predominantly mining and agricultural based economy towards a more multi-sector economy. To achieve a faster economic growth, Malaysia has accepted an unparalleled opportunities for developing this country through globalization (Athukorala, 2003). An offer of combination of locational advantages by the government is a factor that foreign investors got tempted with (Farhad, Alberto, & Ali, 1999), to invest in Malaysia. Foreign investors has been encouraged by the Government to invests in Malaysia in which has the advantage of having a well-developed infrastructure, industrious workforce, as well as politically stable nation with a good legal system with the additional attractiveness of incentives for the foreign investors. In other words, foreign investors are attracted to invest in Malaysia because of the lower cost of production (Wong, 2005). FDI is a medium for acquiring skills, technology, organizational and managerial practices and access to market, besides being the source of finance and employment (Farhad, Alberto, & Ali, 1999). There are a lists of exports by...
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...Multinational Finance Which country had the most direct foreign investments in the United States over the last five years? Why? The United States of America, as one of the world most important economies, has always experienced tremendous amounts of Foreign Direct Investment within different sectors its economy. European nations have historically fueled America’s growth in the past with a variety of foreign Investments. According to the most recent reports disclosed, as of 2011 the largest direct foreign investor in the United States in the past five years is the United Kingdom with $454 billion dollars of investments (Jackson). Likewise the United States is the largest direct foreign investors in the United Kingdom with $421 billion of investments (Jackson). If a company from the United Kingdom purchases 15 percent or more of a US company it is considered foreign controlled. Foreign Direct investment is defined as physical investment into a country from a foreign entity. It can also be defined as a larger-scale, long-term investment outside the investor’s domestic economy. This is apposed to indirect foreign investment that is solely a provider of capital and the investing company has no share in the loss or gain of the company. Indirect investment is an investment in intangible assets, such as securities. The reason for Foreign Direct Investment is The U.S has projects in need of capital .The large influx of capital given to the...
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...2.1.1 Foreign direct investment 2 2.1.2 Economic development 3 2.2 Related literature: The role of FDI in economic development 3 2.2.1 The radical view of FDI 3 2.2.2 The positive view of FDI impact 4 2.3 The impact of economic development 5 3. Case of study: the impact of FDI in garment industry and automobile industry in Viet Nam 7 3.1 Overview of FDI in Vietnam 7 3.2 Garment industry 8 3.3 Tourism Industry 9 3.4 Assess the impact of FDI in Vietnamese economic development 10 4. Conclusion 11 References 14 Appendices 17 1. Introduction to the study Foreign direct investment (FDI) is a concept that has emerged in recent decades. It was born with the trend of globalization and become an interesting topic for economic researchers. The evidence is that there are a large number of studies on this field, including case studies in specific country and cross-country analyses, single-dimensional and multi-dimensional studies, examinations in single-sector and multi-sector. However, until now there are still some debates about the issues related to this concept. One of the noticeable discussions is the relationship between foreign direct investment and economic development. This paper, to some extent, will review these studies about the relationship between foreign direct investment and economic development. In specific, it aims to answer the question: Is foreign direct...
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...Foreign Direct Investment in India India is the largest democracy and is fourth largest economy (in terms of purchasing power parity) in the world. India with its consistent growth performance and abundant high-skilled manpower provides enormous opportunity for investment, both domestic and foreign. Investment in India can be made both by non-resident as well as resident Indian entities. Any non-resident investing in an Indian company is Foreign Direct Investment (FDI). The Government embarked upon major economic reforms since mid-1991 with a view to integrate with the world economy, and to emerge as a significant player in the globalization process. Reforms undertaken include decontrol of industries from the stringent regulatory process; simplification of investment procedures, promotion of foreign direct investment (FDI), liberalisation of exchange control, rationalization of taxes and public sector divestment. The FDI policy was liberalized progressively through review of the policy on an ongoing basis and allowing FDI in more industries under the automatic route. A number of studies in the recent past have highlighted on growing attractiveness of India as an investment destination. According to UNCTAD’s World Investment Report 2007, India is the second most attractive investment destination for FDI for 2007-09. India has one of the most liberal and transparent policies on FDI among the emerging economies. FDI up to 100 percent is allowed under automatic route in all activities...
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...IMPACT OF FOREIGN DIRECT INVESTMENT ON ECONOMIC GROWTH IN NIGERIA BY OKUNLOLA TUNDE S. MATRIC NO: 139191 September 2011 Being research work submitted to Department of Economics, Faculty of Social Sciences, University of Ibadan, in partial fulfillment of the requirement for the award of Bachelor of Science (B.Sc) in Economics CERCTIFICATION I hereby certify that this work was carried out by OKUNLOLA TUNDE S. of Matric No 139191 in the Department of Economics, Faculty of Social Sciences, University of Ibadan. …………………………………. ……………………………… Date Dr. B. Fowowe Supervisor DEDICATION My sole dedication goes to God almighty whose mercy has never ceased in changing me despite all odds, whose boundless love and vast grace is bringing to pass my childhood dreams and fantasies. ACKNOWLEDGMENT My deepest gratitude goes to my parents who always, tirelessly and sacrificially support me, trust me, care for me and love me despite all my short comings and even when it so difficult. May the lord reward you abundantly. And also to my supervisor, Dr. B. Fowowe, I say thank you. Your direct professional...
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...Table of Contents INTRODUCTION 2 LITERATURE REVIEW 3 FOREIGN DIRECT INVESTMENT 5 MAJOR IMPACTS OF FDI 8 EXPORTS 8 TREND IN EXPORT IN INDIA 9 MAJOR FACTORS THAT AFFECT EXPORTS 10 EXPORT TRENDS AND THE WAY AHEAD 12 IMPACT OF FDI ON EXPORT 12 HOW FDI DRIVES EXPORT 12 IMPACT ON SERVICE INDUSTRY 13 METHEDOLOGY 14 PERIOD OF STUDY 14 SOURCES OF DATA 14 HYPOTHESIS 14 RESULT 15 ANALYSIS 16 IMPLICATION 16 CONCLUSION 16 REFERENCES 18 EXHIBITS 20 FIGURES 23 INTRODUCTION Foreign direct investment is an important part of the economy of every country.It helps expedite the globalisation process. Firms across the world interact with other firms situated in different countries. This results in mutual growth of firms and states. Over the years FDI as a percentage of GDP of world has increased significantly. In 1980 the total stock of FDI equalled only 6.6 per cent of world gross domestic product, while in 2003 the share had increased to close to 23 per cent. This implies that the world economy is getting increasingly interconnected resulting into the flow of goods and capital into developing nations. India has seen tremendous growth in the FDI inflow over the past two decades. By 1997 India became the ninth largest recipient of such investment among the developing economies. Flow of capital and goods has impacted various macroeconomic variables of the economy. Export is one of the variables that gets affected due to the increase in FDI.It has seen...
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