CROSS-BORDER INVESTMENTS AND INDUSTRIAL PERFORMANCE IN NIGERIA
This study examines the impact of cross-border investments, which comprised of foreign direct investment (FDI) and foreign portfolio investment (FPI) on industrial performance in Nigeria using time series data for the period 1988-2020 sourced from the World Bank. The study adopted Augmented Dickey-Fuller (ADF) test, co-integration techniques, Granger causality test, and Error Correction Model (ECM) as methods of data analysis. The findings of the study revealed that FDI had a weak negative effect on industrial development in Nigeria while FPI had a positive significant effect on industrial performance. The study also revealed that the exchange rate had a weak negative effect on industrial performance. The study, therefore, recommends that the government of Nigeria should employ tax incentives to discourage the repatriation of profits (earnings) by foreign investors and strengthen the quality of education to boost human capital in order to realize the positive spillover effects of technology and capital transfer by foreign investors. It also recommends that the demand for foreign currency should be reduced by placing an embargo on imported raw material and used items from abroad among others as well as developing the agriculture and manufacturing sector to produce imported items and more export-oriented to generate greater foreign earnings to sustain the stability of the naira.
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