Original Research Article | OPEN ACCESS
Economic Development and Foreign Capital Investment Inflow in Nigeria

Araoye Felix Ebun

Management and Accounting Department, Ladoke Akintola University of Technology, Ogbomoso, Oyo State, Nigeria.;

For correspondence:-     Email: araoyefelix@yahoo.co.uk

Received: February 28, 2021        Accepted: March 29, 2021        Published: March 31, 2021

Citation: Ebun AF. Economic Development and Foreign Capital Investment Inflow in Nigeria. Account Tax Rev 2021; 5(1):80-94 doi:

© 2021 The authors.
This is an Open Access article that uses a funding model which does not charge readers or their institutions for access and distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0) and the Budapest Open Access Initiative (http://www.budapestopenaccessinitiative.org/read), which permit unrestricted use, distribution, and reproduction in any medium, provided the original work is properly credited..


The study investigates the influence of economic development on the foreign capital investment inflow in Nigeria.  The time series secondary data covering the period 1990 to 2019 used for the study were obtained from the Central Bank of Nigeria Statistical Bulletin, Nigeria Stock Exchange fact sheet, Journals libraries and Internet. The study analyzed the data with the use of unit root test to determine the stationarity or otherwise of the time series data employing Augmented Dickey Fuller (ADF) and Phillip-Perron (PP) unit root test. Vector Error Correction Estimates was deployed in determining the influenceof the independent variables on the dependent variable. Granger causality test was also applied in establishing the direction of causality among the variables of the study. The findings revealed that gross domestic product (GDP) and market capitalization (MCAP) has positive but insignificant influence on foreign capital investment inflow in Nigeria. The granger causality resultconfirms evidence of bi-directional causality movement between gross domestic product (GDP) and foreign capital investment inflow (FCII) in Nigeria. It is recommended that by deliberate effort, the Nigeria authority should improve capital expenditure spending on infrastructure of relevant sectors that will ensure enhancement of economic growth.

Keywords: Economic Development, Foreign Capital, Investment, Inflow, Nigeria

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