The Impact of Tax Incentives on Foreign Direct Investment in the Oil and Gas Sector in Nigeria.

Adepeju, Babatunde Shakirat

doi:10.9790/487x-0610115

Cited by 8 publications

(7 citation statements)

References 7 publications

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“…The reason for this finding could be ascribed to the role of TIN towards investment. Many scholars have the opinion that TIN promotes and encourages new investments (Babatunde and Adepeju, 2012; Lim, 2011; Clark, 1999). Considering this, the result indicates that with the availability of TIN, conventional energy stakeholders will be more willing to invest in RE.…”

Section: Discussionmentioning

confidence: 99%

“…TIN generally comprises of capital allowance, reinvestment allowance, tax holiday, taxpayers’ right of election, investment tax credits, interest subsidy, accelerated depreciation and export processing zone (EPZ) incentives (Hellerstein and Coenen, 1995); these incentives are anticipated to yield higher investments that will lead to economic growth (Ohaka and Agundu, 2012). Existing literature illustrated that TIN has a strong influence in attracting investment (Babatunde and Adepeju, 2012; Lim, 2011; Clark, 1999). In Zimbabwe, for instance, Munyanyi and Chiromba, (2015) established the significant influence of TIN on investment in the tourism sector of the country.…”

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 99%

“…The study also leverages the openness of the model to incorporate variable(s) that will further explain intention (Ajzen, 1991). In line with this suggestion and considering the influence of tax incentives (TIN) on investment (Babatunde and Adepeju, 2012), the study considers extending the TPB model by integrating the component of TIN to analyze its impact on the conventional energy stakeholders’ investment intention into RE. According to Bonucchi et al (2015), TIN encourages new investments, attracts and supports investors in certain important sectors of the economy.…”

Section: Introductionmentioning

confidence: 99%

“…Using TIN, existing investors are maintained, while prospective investors are brought into the fold. Existing literature documented TIN to be a significant factor attracting investment (Babatunde and Adepeju, 2012; Lim, 2011; Clark, 1999).…”

Section: Introductionmentioning

confidence: 99%

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Extending the theory of planned behaviour with application to renewable energy investment: the moderating effect of tax incentives

Daiyabu¹,

Manaf

Hsbollah

2022

IJESM

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Purpose The purpose of this study is to deploy and expand the theory of planned behaviour (TPB) model with application to renewable energy investment by incorporating the component of tax incentives (TIN). This will serve as an additional measure in understanding the conventional energy stakeholders’ investment intention into renewable energy in Nigeria. Design/methodology/approach Data was collected from 357 individual key conventional energy stakeholders in Nigeria using survey questionnaires. The research model was tested using structural equation modelling. Findings The results from the study revealed the applicability of the TPB in predicting the conventional energy stakeholders’ investment intention into renewable energy. The result indicates that attitude and subjective norm are significantly associated with investment intentions. Research limitations/implications The outcome implies that the integration of tax incentives can improve the predictive power of the model as the introduced variable demonstrates a significant impact on the conventional energy stakeholders’ investment intention into renewable energy. Practical implications This study extends on the well-established TPB model by integrating tax incentives in understanding investment intentions and the outcome implies a significant association of tax incentives with investment intention and moderated the influence of attitude and subjective norm over the conventional energy stakeholders’ investment intention. Originality/value TPB has been widely deployed and even extended to predict intention in numerous fields of study. Available literature presents the lack of such empirical research that focuses on investment in Nigeria and specifically regarding energy investment. The outcome highlighted the significant influence of tax incentives, thus the need for policymakers to suggest and implement various tax incentives to attract private investment into renewable energy for electricity generation that will consequently assist in achieving SDG-7 and mitigate climate change.

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Section: Discussionmentioning

confidence: 99%

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Extending the theory of planned behaviour with application to renewable energy investment: the moderating effect of tax incentives

Daiyabu¹,

Manaf

Hsbollah

2022

IJESM

View full text Add to dashboard Cite

show abstract

“…Transparency and political stability were used as control variables in the study. Transparency was measured using the transparency index based on CPI information package 2016, where countries are profiled on an index 0-10 with 0 representing highly corrupt status and 10 representing highly transparent status [27]. On the other hand, political stability was measured by a proxy of the average political freedom and civil liberty based on a range of 1-7, where 1 and 7 indicate good and weak political stability, respectively.…”

Section: Methodsmentioning

confidence: 99%

Impact of Tax Incentives on Foreign Direct Investment Flow in Nigeria

Ibrahim

Garba

Muhammad

et al. 2022

PoS

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The growing pace of the globalisation process has triggered economic development, especially among developing nations. One of the immediate responses to this phenomenon is the increasing trend of Foreign Direct Investment flows among countries driven by some factors. This paper aimed at determining the impact of tax incentives (tax holiday and custom duty exemption) on Foreign Direct Investment inflow into Nigeria over the period 2008-2018. Using secondary data obtained from the Nigerian Investment Promotion Commission, Central Bank of Nigeria and Nigerian Customs Service, Driscoll-Kraay Standard Errors regression analysis was used via STATA version 14 to test the research hypothesis. The study's findings revealed that tax incentive has a positive and significant impact on Foreign Direct Investment inflow. Specifically, tax holiday has significant positive effect on FDI at 5% level of significance (β=0.1578; t=3.99; p<0.05) while custom duties exemption reported significant positive effect on FDI at 1% level of significance (β=0.2436; t=5.61; p<0.01). It is recommended that the government maintain and strengthen its policies on tax holidays and customs duties exemption to improve Foreign Direct Investment inflow, thereby developing the national economy.

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The end of tax incentives in mining? Tax policy and mining foreign direct investment in Africa

Coulibaly

Camara

2022

African Development Review

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African countries generally cut corporate income tax (CIT) rates in the hopes of attracting foreign direct investment (FDI), whereas the effectiveness of tax rate reductions in attracting extractive industries FDI is controversial. This paper estimates the impact of the statutory CIT rate, as applied to mining companies, on FDI inflows to the gold and silver sectors of African economies. The estimation results indicate that the impact of the mining CIT rate on the host country's gold and silver FDI inflows is negative, but not statistically significant, at the conventional levels of significance. These results suggest that cuts in the CIT rate applied to mining companies will not necessarily attract FDI to gold and silver projects. Moreover, we find a strategic complementarity in gold and silver FDI inflows between countries, suggesting that an increase in the host country's gold and silver FDI inflows may stimulate FDI to gold and silver projects in neighbouring countries. Furthermore, the results show that infrastructure, government stability and gold and silver reserves positively affect gold and silver FDI inflows. The main findings of the paper suggest that, instead of granting corporate tax incentives, governments may consider improving the quality of socio‐economic infrastructure, the availability of geological information and promoting political and economic stability for attracting mining investments.

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The Impact of Tax Incentives on Foreign Direct Investment in the Oil and Gas Sector in Nigeria.

Abstract: Abstract:The government of oil-rich Nigeria strived to attract Foreign Direct Investment (FDI)

Cited by 8 publications

References 7 publications

Extending the theory of planned behaviour with application to renewable energy investment: the moderating effect of tax incentives

Extending the theory of planned behaviour with application to renewable energy investment: the moderating effect of tax incentives

Impact of Tax Incentives on Foreign Direct Investment Flow in Nigeria

The end of tax incentives in mining? Tax policy and mining foreign direct investment in Africa

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