IS FOREIGN DIRECT INVESTMENT INFLOW MARKET SEEKING IN AFRICA? EVIDENCE FROM THE AFRICAN LARGEST ECONOMY
IS FOREIGN DIRECT INVESTMENT INFLOW MARKET SEEKING IN AFRICA? EVIDENCE FROM THE AFRICAN LARGEST ECONOMY

Summary/Abstract: The aim of this study is to examine whether FDI inflow is a market seeking in the African largest economy in which majority of the past studies have not fully explored. FDI Data and other macroeconomic data were collected from UNCTAD investment report and WDI respectively. ARDL and Bound test techniques were used to address the objective this study. Consequently, the findings that originated from this work established the following among others that the principal determinants of FDI inflows in Nigeria are past FDI inflows and growth rate of the economy. Meanwhile, openness of the economy is a minor determinant of FDI inflows in the country. However, market size is a minor factor that discourages FDI inflows in Nigeria. This implies that FDI inflow in Nigeria is not market seeking. Furthermore, due to these important findings, this paper makes the following recommendations for the policy makers, investors, financial institutions regulators and future researchers as follows: firstly, if the goal of the policy makers in Nigeria is to attract more FDI inflows, the country should be committed to the continuous expansion of its market size, liberalizing its economy and ensuring double digits growth rate in the country.

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