Open AccessThe Role of Foreign Direct Investment in Stock Market Development in Nigeria: A Test of Complementarity
Author(s) -
Gbenga Festus Babarınde,
Departmentof Banking
Publication year - 2020
Publication title -
the review of finance and banking
Language(s) - English
Resource type - Journals
eISSN - 2067-2713
pISSN - 2067-3825
DOI - 10.24818/rfb.20.12.02.05
Subject(s) - foreign direct investment , stock market , granger causality , stock (firearms) , complementarity (molecular biology) , economics , pairwise comparison , monetary economics , ordinary least squares , international economics , business , macroeconomics , econometrics , mechanical engineering , paleontology , statistics , genetics , mathematics , horse , engineering , biology
This paper examines the role of foreign direct investment (FDI) in stock marketdevelopment in Nigeria for the period 1981-2018 via Dynamic Ordinary Least Squares(DOLS)and pairwise Granger causality techniques. Empirical Öndings indicate that FDI plays apositive signiÖcant role in the development stock market in Nigeria. Also, a unidirectionalcausality áows from FDI to stock market development. This study concludes that FDI con-stitutes a catalyst to stock market development in Nigeria, which implies the complementaryrole of FDI in stock market. Therefore, Nigerian government should ensure investors-friendlymacroeconomic framework and implement policies to encourage ináows of FDI in Nigeria.