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Foreign Private Investment, Capital Formation and Economic Growth in Nigeria: a two stage least square approach

Journal of Economics and Sustainable Development

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Title Foreign Private Investment, Capital Formation and Economic Growth in Nigeria: a two stage least square approach
 
Creator Anthony, Orji
Peter.N., Mba,
 
Description Given the likely simultaneity between FPI, Capital Formation and Growth, this work studies the relationship between foreign private investment, capital formation and economic growth in Nigeria using the two-stage least squares (2SLS) method of estimation. The study finds that the long run impact of capital formation and foreign private investment on economic growth is larger than their short-run impact. There is thus, a long-run equilibrium relationship among the variables as the error correction term is significant, but the speed of adjustment is small in both models. The two stage least squares estimates are very close to the OLS estimates suggesting that OLS estimates are consistent and unbiased. Hence, endogeneity was not a problem in the estimated models. There is therefore no simultaneity between GDP growth and capital formation model. These findings therefore have some policy implications as discussed in the work.
 
Publisher The International Institute for Science, Technology and Education (IISTE)
 
Date 2011-07-26
 
Type info:eu-repo/semantics/article
Peer-reviewed Article
info:eu-repo/semantics/publishedVersion
 
Format application/pdf
 
Identifier https://iiste.org/Journals/index.php/JEDS/article/view/131
 
Source Journal of Economics and Sustainable Development; Vol 2, No 2 (2011); 14-27
 
Language eng
 
Relation https://iiste.org/Journals/index.php/JEDS/article/view/131/11
 
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