IMPACT OF FOREIGN DIRECT INVESTMENT INFLOW ON ECONOMIC GROWTH IN A PRE AND POST DEREGULATED NIGERIA ECONOMY. A GRANGER CAUSALITY TEST (1970-2010)

Abstract

The research study takes a look at the impact of Foreign Direct Investment inflow and economic growth in a pre and post deregulated Nigerian economy, a Granger causality test was use as the estimated technique between 1970 - 2010. However, the analysis de-aggregates the economy into three period; 1970 to 1986, 1986 to 2010 and 1970 to 2010, to test the causality between foreign direct investment inflow (FDI) and economic growth (GDP). However, the result of the causality test shows that there is causality relationship in the pre-deregulation era that is (1970-1986) from economic growth (GDP) to foreign direct investment inflow (FDI) which means GDP causes FDI, but there is no causality relationship in the post-deregulation era that is (1986-2010) between economic growth (GDP) and foreign direct investment inflow (FDI) which means GDP causes FDI. However, between 1970 to 2010 it shows that is causality relationship between economic growth (GDP) and foreign direct investment inflow (FDI) that is economic growth drive foreign direct investment inflow into the country and vice versa.

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