IMPACT OF FOREIGN DIRECT INVESTMENT (FDI) ON THE ECONOMIC GROWTH OF DEVELOPING ECONOMIES

IMPACT OF FOREIGN DIRECT INVESTMENT (FDI) ON THE ECONOMIC GROWTH OF DEVELOPING ECONOMIES (ECONOMICS PROJECT TOPICS AND MATERIALS)

ABSTRACT

This study succinctly examined FDI development and its impact on the Nigeria Economy from 1995 – 2010. This trend show that FDI  although had some drawbacks due to economic instability and other economic factors that militated against its rise until recent democracy and economic reforms, improved and characterized its changes significantly. The ordinary least square (OLS) method of multiple regression was used and econometric applications all used for the interpretations and analysis.

The findings conclude that FDI has significantly increase GDP growth rate and enhance foreign reserve and economic performance.

CHAPTER ONE

1.1    INTRODUCTION

The need to accelerate the pace of economic growth and development by many Countries, especially the less developed coun ies (LDC) i.e. Nigeria, have propelled them to make deliberate efforts to attract foreign direct investment (FDI).

Ezirim, Emenyeonu, Muoghalu (2002) suggested that these efforts are geared towards improving the general investment c1imat through the adoption and implementation of foreign investment. Ho ever, friendly policies and programme such as Tax incentives, export promotion significantly, the drive for foreign investment drives the various benefits it confers on the host Country. The benefits include addition of new capital, technology, improved management and market access,. FDI has also been acknowledged as a potent source of improving efficiency of the productive sector through competition, stimulation of economic progress, creation of jobs and fostering growth in the host economies.

According to Narula and Portelli (2004) over the past two decades, the growth of Multinational enterprises (MNE’s) activities in developing countries has increasingly been regarded as one of the defining characteristics of the world economy and an engine of economic growth of host economies.

Multinational Enterprises (MNEs) related externalities have been, although increased interest from developing countries because of the perceived benefits in terms of the injection of capital, technology and knowledge. However, key multinational enterprises (MNE’s) externalities include the knowledge spillovers and link es from the … MNEs to domestic firms in host countries.

The nature of these MNE- externalities may either arise from pure market transactions (e.g. Through MNE vertical linkages) or else through knowledge spillovers which take non-mar monetary firm, non-monetary firm.

IMPACT OF FOREIGN DIRECT INVESTMENT (FDI) ON THE ECONOMIC GROWTH OF DEVELOPING ECONOMIES (ECONOMICS PROJECT TOPICS AND MATERIALS)