Examining the Relative Roles of Domestic and Foreign Direct Investments in Nigeria


  • Evans S. Osabuohien Covenant University
  • Ayobami O. Soogun Covenant University
  • Ese Urhie


This study examines the relative relevance of domestic investment (DI) and foreign direct investment (FDI) on economic performance in Nigeria (1980-2014). In an attempt to achieve this broad objective, annual time series data sourced from the Central Bank of Nigeria (CBN)'s Statistical Bulletin, which was estimated using Vector Error Correction (VEC) technique, among others. The results, inter alia, show that both DI and FDI had significant effect on Nigeria's economic performance; however, the influence of the former was observed to be far greater than the latter with marked difference both in terms of the level of significance and size. Thus, the study recommends, among others, the need for government to create the ambience that will enable domestic investors to thrive, on one hand, and be complemented by foreign investment, on the other.

Keywords: Domestic investment, Foreign direct investment, Economic performance, Vector error correction model

JEL Classifications: F21; F23


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Author Biography

Evans S. Osabuohien, Covenant University

Dr. Evans Osabuohien started his lecturing and research career in 2004 at Covenant University, Nigeria. He was a research fellow at German Development Institute, Bonn with fellowship from Alexander von Humboldt Foundation (October 2013 –December 2014).He held same fellowship at German Institute for Global and Area Studies (GIGA), Hamburg (January –September 2013). His other international awards: Swedish Institute's Guest Doctoral Fellowship (as guest Ph.D Candidate at Lund University 2009/2010); Council for the Development of Social Science Research in Africa (CODESRIA)'s grant for Ph.D Thesis in 2009; First Prize for FLACSO-WTO Chair Award in 2012. He is presently the coordinator of Postgraduate programme in his Department. He also coordinates the collaboration between Covenant University, Nigeria and German Development Institute, Bonn as well as the cooperation between Covenant University, Nigeria and United Nations Conference on Trade & Development Virtual Institute (UNCTAD Vi), Geneva. He has executed research consultancy services for international organizations such as: UNCTAD Vi; The Centre for Economic and Policy Research (CEPR); African Economic Research Consortium (AERC); Economic Community for West African States (ECOWAS); Trade Policy Training Centre in Africa (TRAPCA), among others. He has research interest in Institutional, International and Development Economics where he has published over 55 scholarly articles and presented research findings in international conferences/workshops in five continents of the world. His recently edited book ‘Handbook of Research on In-country Determinants and Implications of Foreign Land Acquisitions' was released December 2014. He serves as reviewer to many international journals including: World Development; African Development Review; Land Use Policy; South African Journal of Economics; Journal of Environmental Policy and planning; Journal of Environmental Planning and Management; The Developing Economies; The Journal of Developing Areas; among others. He is a member of learned societies, namely: Royal Economic Society; Nigerian Economic Society; International Society of New Institutional Economics; African Growth and Development Policy Modelling Consortium (AGRODEP), CODESRIA; AERC; Young African Researchers in Agriculture Network (YARA), United Nations Conference on Trade & Development (UNCTAD) Virtual Institute; and Global Trade Analysis Project (GATP), among others.




How to Cite

Osabuohien, E. S., Soogun, A. O., & Urhie, E. (2017). Examining the Relative Roles of Domestic and Foreign Direct Investments in Nigeria. International Journal of Economics and Financial Issues, 7(4), 365–371. Retrieved from http://econjournals.com/index.php/ijefi/article/view/2753