Since 2014
Capital Account Liberalisation and Foreign Direct Investmentin Nigeria: A Bound-Testing Approach
Botswana Journal of Economics
View Archive Info| Field | Value | |
| Title |
Capital Account Liberalisation and Foreign Direct Investmentin Nigeria: A Bound-Testing Approach
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| Creator |
Bankole, AS
Ayinde, TO |
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| Subject |
Bound-Test, Capital Accounts, Foreign Investments, Neo-Classical.
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| Description |
This study focuses on the neoclassical counter-revolution framework to investigate the relationship between capital account liberalisation and foreign direct investment in Nigeria for the periods 1980-2011. The technique of analysis employed is the Bound-Testing Approach. This technique, which was later re-parameterized to investigate the short-run dynamics, is primarily used to ascertain the long-run equilibrium condition among the variables. The results obtained largely supports the neoclassical counter-revolution framework which craves for government involvement in the natural workings of the economy to a minimal level; only for regulatory purposes. Thus, market-based measures towards FDI should be checked with legal/political measures; especially for capital control purposes. More so, the rate of inflation has alternate effect on FDI in Nigeria; implying that the effect of price level on FDI has not been consistent. On the whole, foreign direct investment in Nigeria is found to be driven by non-capital account liberalisation. In effect, the liberalisation of capital account transactions in Nigeria does not matter for FDI; either in the short-run or long-run situation. As such, government should focus on non-liberalising factors such as qualitative governance, price stability and institutional development in order to enhance foreign direct investment in Nigeria.Key Words: Bound-Test, Capital Accounts, Foreign Investments, Neo-Classical.
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| Publisher |
The Botswana Economics Association
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| Contributor |
—
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| Date |
2015-02-16
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| Type |
info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion Peer-reviewed Article |
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| Format |
application/pdf
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| Identifier |
https://www.ajol.info/index.php/boje/article/view/113104
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| Source |
Botswana Journal of Economics; Vol 12, No 2 (2014); 14-32
1810-0163 1810-0163 |
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| Language |
eng
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| Relation |
https://www.ajol.info/index.php/boje/article/view/113104/102830
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| Rights |
Copyright for content published in the journal is held by The Botswana Economics Association
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