Impact of Foreign Direct Investment (Fdi) On the Stock Market Performances in Nigeria (1985-2014)

Onyinyechi, Omodero Cordelia; Ekwe, Michael Chidiebere

doi:10.11114/afa.v3i1.1932

Cited by 4 publications

(3 citation statements)

References 6 publications

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“…Domestic investment, which includes both private and public investment, according to Olise et al (2013), is a critical component of overall investment. FDI, on the other hand, FDI was defined by Onyinyechi and Ekwe (2017) as the net inflow of investment made to acquire a long-term stake (10% or more voting shares) in a business operating in a country other than the investor's. FDI and domestic investment are likely to have a negative connection.…”

Section: Data Measurement and Sourcementioning

confidence: 99%

"Does Foreign Direct Investment Crowd in or Crowd out Domestic Investment in South Africa? An ARDL-ECM Approach "

Pamba¹

2023

IJMRE

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The aim of this study is to empirically examine the link between Foreign Direct Investment (FDI) and Domestic Investment (DI) in South Africa over the period of 41 years . Accurately, it attempts to determine whether FDI crowds in or crowds out DI in South Africa. DI is sub-divided into private domestic investment (credit to the domestic private sector) and public corporation investment (state owned enterprises). We used the Autoregressive Distributed Lag-Error Correction Model (ARDL-ECM) technique to ascertain long run and short run effects concurrently after establishing that the variables were stationary (using the PP test). The results of the unit root test show that all variables are integrated of order zero I(0) or integrated of order one I(1), indicating that the series of variables are stationary in the level or first difference form. The findings revealed that variables are cointegrated in the long run. The ARDL model found a negative link between FDI and domestic investment. The result implies that FDI crowds out domestic investment. Moreover, the long-run estimate revealed that domestic investment is crowded in by government investment expenditure (GINV). Other findings indicate that, GDP crowds out private domestic investment while crowding in public corporation investment. Moreover, the long-run estimate revealed that domestic investment is crowded in by gross domestic savings (SAV). On the other hand, the real exchange rate (EXCR) crowds out private domestic investment while crowding in public corporation investment. Trade openness (TRA) crowds out domestic investment. Furthermore, the short run estimate revealed that FDI, EXCR, and TRA are crowding out private domestic investment while GINV, GDP, and SAV are crowding in private domestic investment. Other findings discovered that, in the short run, public corporation investment is crowded out by FDI, GDP, EXCR and TRA, while GINV and SAV crowd in public corporation investment.According to the CUSUM, the models are structurally stable.

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Section: Data Measurement and Sourcementioning

confidence: 99%

"Does Foreign Direct Investment Crowd in or Crowd out Domestic Investment in South Africa? An ARDL-ECM Approach "

Pamba¹

2023

IJMRE

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“…Expanding the argument of macroeconomic determinants is the supposition that, the official exchange rate of a nation is an important element in determining FDI inflows, which is applicable in some research studies (Ang, 2008;Baby & Sharma, 2017;Bekana, 2016;Dua & Garg, 2015;Ezeoha & Cattaneo, 2012;Naanwaab & Diarrassouba, 2015;Oladipo, 2013;Omodero & Ekwe, 2017;Wafure & Nurudeen, 2010). Dua and Garg (2015), for instance, had previously commented on the host nation's currency depreciation regarding its exchange rates.…”

Section: Macroeconomic Determinants Of Fdimentioning

confidence: 99%

Environmental Pollution and Economic Growth Determinants in Foreign Direct Investment Inflows: The Case for Sub-Saharan Sierra Leone

Mansaray

2023

IJARBSS

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The primary objective of the present research was the examination of environmental pollution, economic growth, and supplementary selected macroeconomic elements as determinants of foreign direct investment inflows into Sub-Saharan Sierra Leone for the postconflict period, 2002-2020, and whether the association between the determinants and foreign direct investment is long-term and short-term. The research methodology was quantitative, and the dataset was time series with 76 observations and 10 variables. Using the AR(2) model, the findings indicated the lags of foreign direct investment, gross fixed capital formation, carbon dioxide, trade, and population growth were significant determinants of foreign direct investment inflows. Furthermore, applying the Phillips-Ouliaris cointegration model, the results indicated a statistically significant long-run association between foreign direct investment and, at least, one determinant (Rho = -39.458, Tau = -5.024, p < .05). Additionally, the error correction model (errorECM1) applied to explore the short-run deviation from the long-run had the expected sign, and was statistically significant (βerrorECM1 = -.524, SE = .158, t = -3.31, p = .002), representing a speedy conversion movement to long-run equilibrium of about 52.4% annually. Nonetheless, the research restricted itself to 19 post-conflict years (2002)(2003)(2004)(2005)(2006)(2007)(2008)(2009)(2010)(2011)(2012)(2013)(2014)(2015)(2016)(2017)(2018)(2019)(2020), which may be inadequate to recognize the comprehensive determinant of foreign direct investment inflows. Succeeding studies must embrace additional years, including pre-conflict periods, to recognize the comprehensive determinants of foreign direct investment inflows into Sub-Saharan Sierra Leone.

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“…The analysis concluded that interest rates and crude oil had a detrimental effect on the stock index. Onyinyechi & Ekwe (2016) conducted comparable research on the Nigerian stock market. Secondary data collected between 1985 and 2014 were analyzed using multiple regression analyses.…”

Section: Literature Review Stock Exchange and Foreign Direct Investmentmentioning

confidence: 99%

Understanding the Moderating Role of Dollar Exchange Rate in Shaping the Linkages Between Foreign Direct Investment and Pakistan Stock Exchange Performance

Abbas,

Idrees,

Syed

2023

Contemporary Issues in Social Sciences and Management Practices

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The stock exchange market is a crucial component of the economy, providing investors with the opportunity to participate in the shares of different enterprises. This study investigates the influence of the United States Dollar exchange rate and foreign direct investment (FDI) on the Karachi Stock Exchange-100 index, a key component of the Pakistan Stock Exchange. Utilizing monthly data from July 2008 to March 2023, the research employs an Augmented Dickey-Fuller test for stationarity and Johnson Cointegration test for model confirmation. Results from the Granger Causality test highlight significant long-term relationships between FDI, inflation, interest rates, balance of payments, and the Karachi Stock Exchange-100 index. Conversely, the exchange rate and FDI exhibit statistical insignificance in the short term. Introducing moderation effects, the exchange rate demonstrates negligible long-term impact but reveals a negative short-term association with the Karachi Stock Exchange-100 index. Impulse response analysis indicates positive reactions to shocks for FDI, balance of payments, and the dollar exchange rate, with inflation and interest rates exhibiting negative responses. The study's novel contribution lies in uncovering the nuanced temporal dynamics between economic indicators and the stock market, offering valuable insights for policymakers crafting investment strategies to navigate market volatility and enhance stock market returns.

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Impact of Foreign Direct Investment (Fdi) On the Stock Market Performances in Nigeria (1985-2014)

Cited by 4 publications

References 6 publications

"Does Foreign Direct Investment Crowd in or Crowd out Domestic Investment in South Africa? An ARDL-ECM Approach "

"Does Foreign Direct Investment Crowd in or Crowd out Domestic Investment in South Africa? An ARDL-ECM Approach "

Environmental Pollution and Economic Growth Determinants in Foreign Direct Investment Inflows: The Case for Sub-Saharan Sierra Leone

Understanding the Moderating Role of Dollar Exchange Rate in Shaping the Linkages Between Foreign Direct Investment and Pakistan Stock Exchange Performance

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