Foreign Capital Flow in Niger: An Assessment of Impact Using System Equation Method

Abstract

Capital inflow is an important factor for a country's economy. In this paper our main purpose is to investigate or to assess if the capital from abroad has a significant impact on economic growth in Niger. Our analysis takes data from 1980 to 2012 into consideration by using system equation method or the concept of cointegration and the vector error correction Model of GDP Growth Rate (GDPGR), Development Assistance (DASSIS), Foreign Direct Investment (FDI), Migrants' Remittance (MIGREMIT), Real Exchange Rate (REEXR) and Domestic Investment (DOMINV). We pay a particular attention on the impact of Development Assistance, Foreign Direct Investment, and Migrants' Remittance. The result of analysis shows an insignificant impact of Development Assistance (DASSIS), Foreign Direct Investment (FDI), on the growth in contrast with our expectation. Migrants' Remittance on his side has a significant relation on GDP performance.

The Impact of Foreign Direct Investment on Economic Growth in Malaysia

“…This was contradicting with the result obtained by Ousseini, Hu and Aboubacar (2015) in which there was no significant relationship between FDI and economic growth in Nigeria compared to domestic investment. Tabassum and Ahmed (2014) highlighted that FDI was less significant on Bangladesh's economic growth compared to domestic investment.…”