Impact of Inward Foreign Direct Investment on Economic Growth in Developing Countries: Nigeria

By

ACKNOWLEDGEMENTS

I would like to take this chance for thanking my research facilitator, friends and family for support they provide, their belief in me as well as the guidance they provided me, without that I would have never been able to do this research.

DECLARATION

I, (Your name), would like to declare that all contents included in this dissertation stand for my individual work without any aid, & this dissertation has not been submitted for any examination at academic as well as professional level previously. It also represents my own views & not essentially the ones associated with university.

Signed __________________ Date _________________

TABLE OF CONTENTS

ACKNOWLEDGEMENTSii

DECLARATIONiii

CHAPTER 1: INTRODUCTION1

Background of the Study1

Problem Statement2

Aims of the Study2

Objectives of the Study3

CHAPTER 2: LITERATURE REVIEW4

FDI definition4

Theories Explaining Location of FDI to Developing Countries4

Analysis of Determinants5

Existing Literature6

Theoretical Approach of Foreign Direct Investment6

Reasons of Firms Investing Abroad7

Theories Explaining Location of FDI to Developing Countries7

Nigeria: An Overview of Economy8

CHAPTER 3: METHODOLOGY10

Methodological Approach10

Research Approach11

Justification of Research Method11

Data collection Techniques12

Data Collection12

REFERENCES13

CHAPTER 1: INTRODUCTION

Background of the Study

The study has been carried out on “the impact of inward Foreign Direct Investment on the economic growth of the developing countries, the case study of Nigeria. An analysis of the growth performance of Nigeria indicates that overall, economic growth has been relatively slow during the last two decades. Between 1967 and 1970, the growth of Nigeria's real gross domestic product (GDP) averaged around 5.5 percent per year, in spite of the disruption of economic activity that the civil war caused during this period. Performance continued to improve in the early 1970s, with the GDP growth rate reaching 12.1 percent in 1974, an impressive, and somewhat above average performance by international standards.

However, on the basis of the macroeconomic indicators, there was a slowdown in growth immediately after 1974, with negative growth in some of the ensuing years. From 1974 to 1996, the years on which this studies particularly focuses, average real GDP grew by only 2.8 percent, while real per capita GDP declined by about 0.01 percent per year.

Dunning (1993), explains a general overview of the motives for FDI, which depend on the industrial sector and the characteristics of the given firm. These are: Natural Resource Seeking, related to physical resources, labour, technological or management capacity limited to a location; Market seeking, referring to the size of markets for goods and services; Efficiency seeking to exploit differences in factor endowments, cultures, market structures and institutional arrangements; and Strategic Asset Seeking, merging to face strong competitors and access to distribution channels.

Economic growth occurs whenever there is an increase in the goods and services produced over successive periods in an economy. All such goods and services (aggregate output) are measured by the country's gross domestic product (GDP). In simple terms, GDP is a measure of the market value of final goods and services produced within an economy in a year.

Problem Statement

Different past studies have been performed on analyzing the impact of the inward FDI on the ...