Open AccessEffect of Foreign Private Investment on the Development of Small and Medium Enterprises in Nigeria
Author(s) -
Amadin Victor Idehen,
Osarumwense Iguisi
Publication year - 2020
Publication title -
international journal of research in business and social science
Language(s) - English
Resource type - Journals
ISSN - 2147-4478
DOI - 10.20525/ijrbs.v9i7.957
Subject(s) - foreign direct investment , foreign portfolio investment , gross private domestic investment , business , gross domestic product , portfolio , divestment , investment (military) , portfolio investment , return on investment , government (linguistics) , exchange rate , monetary economics , open ended investment company , economics , international economics , finance , production (economics) , economic growth , macroeconomics , philosophy , politics , political science , law , linguistics
This study sought to examine the effect of foreign private investment on the development of small and medium scale enterprises (SME’s) in Nigeria. The study adopted a longitudinal research design which made the use of secondary data imperative. The study employed data on the foreign private investments and development of SMEs in Nigeria covering 1991-2018. The variables used are Net Foreign direct investment, Net Foreign Portfolio investment, percentage of foreign direct investment in Gross Domestic Product (GDP), and development of SMEs in Nigeria. The technique adopted in this study is multiple regressions to test the hypotheses. E-view econometric software 3:1 was used for the analysis. The result revealed that the value of Foreign Direct Investment (FDI) and Foreign Portfolio Investment (FPI) have a negative relationship with the development of SME’s and Foreign Direct Investment (FDI) in the percentage of gross domestic product and exchange rate have a negative and significant impact on the development of SME’s in Nigeria. It was recommended among others that government should increase its funding of small and medium scale enterprises, SME’s should be encouraged to go on public offer to expand the scope of funds, the exchange rate must be strengthened to encourage SME’s to attract funds and the needs to stabilized the economy to discourage divestment.