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Rivers State University, Port Harcourt.
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| Title: | Macroeconomic Variables And Inflow Of Foreign Direct Investment: A Comparative Study Of Nigeria And Ghana |
| Author(s): | OZUZU CSR & ISUKUL Araniyar |
| Abstract: | This study examined macroeconomic factors that determine foreign direct investment into Nigeria and Ghana. The effect Time series data was sourced from Central Bank of Nigeria Statistical Bulletin and World bank data base from 19872020. Net foreign direct investment to gross domestic product was modeled as the function of exchange rate, real interest rate, real gross domestic product, inflation rate and money supply. Ordinary Least Square (OLS), Augmented Dickey Fuller Test, Johansen Cointegration test, normalized cointegrating equations, parsimonious vector error correction model and pairwise causality tests were used to conduct the investigations and analysis. The study found that the estimated model showed that 45.7 percent variation in net foreign direct investment can be explained by the macroeconomic variables as modeled while the variable explained 66.1 percent in Ghana. Beta coefficient of the variables found that real gross domestic products has positive effect on net foreign direct investment in Nigeria while the variable has negative effect on Ghanaian net foreign direct investment, real interest rate has positive effect on net foreign direct investment in Nigeria while the variable has negative effect on Ghanaian net foreign direct investment, money supply has positive effect on net foreign direct investment in Nigeria while the variable also has positive effect on Ghanaian net foreign direct investment, inflation rate has positive effect on net foreign direct investment in Nigeria while the variable also has positive effect on Ghanaian net foreign direct investment while money exchange rate has negative effect on net foreign direct investment for both countries. The study recommends that Policies of the government to ensure price stability and macroeconomic stability are required to attract foreign direct investment into the country. Government should formulate sound foreign exchange rate policy that will attract foreign direct investment through exchange rate stability. |
| Keywords: | Macroeconomic Variables, Foreign Direct Investment, Comparative Study Nigeria, Ghana |
| Journal: | Economic and Social Science Review Vol 1 No 1 |
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