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In recent years, many less developed countries have thrown open their doors to foreign investment in manufacturing. It is believed that, by producing goods locally which otherwise would have been imported, foreign exchange would be conserved. This paper analyses the balance of payments impact of foreign direct investment in the manufacturing sector of Nigeria's economy to determine whether it is cheaper to produce locally through foreign-owned firms or to use any other alternate means of supplying local demand.

Balance of Payments Effects of Investment in Manufacturing: The Case of Nigeria