The Role of Foreign Direct Investment in Stock Market Development in Nigeria: A Test of Complementarity
The Role of Foreign Direct Investment in Stock Market Development in Nigeria: A Test of Complementarity
Author(s): Gbenga BabarindeSubject(s): Supranational / Global Economy, Business Economy / Management, Economic history, Recent History (1900 till today), International relations/trade, Financial Markets
Published by: EDITURA ASE
Keywords: DOLS; Foreign Direct Investment; Granger Causality; Structural breaks; Stock Market;
Summary/Abstract: This paper examines the role of foreign direct investment (FDI) in stock market development in Nigeria for the period 1981-2018 via Dynamic Ordinary Least Squares(DOLS) and pairwise Granger causality techniques. Empirical findings indicate that FDI plays a positive significant role in the development stock market in Nigeria. Also, a unidirectional causality flows from FDI to stock market development. This study concludes that FDI constitutes a catalyst to stock market development in Nigeria, which implies the complementary role of FDI in stock market. Therefore, Nigerian government should ensure investors-friendly macroeconomic framework and implement policies to encourage inflows of FDI in Nigeria.
Journal: The Review of Finance and Banking
- Issue Year: 12/2020
- Issue No: 2
- Page Range: 175-187
- Page Count: 13
- Language: English