Open AccessImpact of Fiscal Prudence and Financial Development on Foreign Direct Investment Inflow: Nigerian Evidence
Author(s) -
Mukhtar Shuaibu
Publication year - 2021
Publication title -
journal of contemporary research in social sciences
Language(s) - English
Resource type - Journals
ISSN - 2641-0249
DOI - 10.33094/26410249.2021.34.87.100
Subject(s) - foreign direct investment , prudence , economics , foreign exchange reserves , financial sector development , monetary economics , debt , capital formation , financial system , private sector , world development indicators , finance , macroeconomics , international economics , monetary policy , financial capital , financial sector , market economy , economic growth , human capital , philosophy , theology
Foreign direct investment in a globalized and information technology driven environment, as we have today in the 21st century, acted as a driver of growth. This paper provides further evidences on macroeconomic management of FDI in emergent economies especially in Africa. The paper empirically measures the effects of fiscal prudence and financial development on foreign direct investment inflow in Nigeria. It tested the importance of household consumption, domestic credit to the private sector, fixed capital formation, domestic savings, external debt, foreign reserve and financial development for the purpose of ensuring FDI inflow in Nigeria. It findings show that domestic credit to private sector, fixed capital formation, foreign reserve and financial development are statistically significant in the case of Nigeria. The econometric methodologies followed for the study are log-linear regressions and ARDL bound testing. Data was sourced from National Bureau of statistics and World Bank’s World Development Index for the period ranging from 1985 to 2018.