Impact of Inward Foreign Direct Investment in Developing Countries: A case study of Nigeria

By

ACKNOWLEDGEMENT

I would like to thank my supervisor for supporting me throughout my project and giving his valuable suggestions. Finally thanks to all my friends and family for their utmost support and inspiration.

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

ACKNOWLEDGEMENT2

DECLARATION3

Background of the Study6

Overview6

Different Sectors in Nigerian Economy6

Economic Reforms & Deregulation of the Economy7

Problem Statement9

Aims of the Study9

Objectives of the Study10

Purpose of the Study11

Significance of the Study11

Rationale of the Study12

Research Questions14

CHAPTER 2: LITERATURE REVIEW15

Theoretical Framework15

Definition of Foreign Direct Investment15

Theories Explaining Location of FDI to Developing Countries16

Analysis of Determinants17

Existing Literature17

Theoretical Approach of Foreign Direct Investment18

Reasons of Firms Investing Abroad18

Theories Explaining Location of FDI to Developing Countries20

CHAPTER 3: METHODOLOGY24

Introduction24

Methodological Approach24

Research Approach25

Research design26

Research Methodology27

Justification of Research Method28

Rationale for a Quantitative Research28

Rationale for a Qualitative Study29

Data Collection30

Scope of the study30

Research Classification30

Data Analysis Technique31

Limitations of the Research Study33

Critical Appraisal tool33

Ethical Considerations33

CHAPTER 4: ANALYSIS35

Data Analysis35

Regression Analysis37

Descriptive Statistics37

Model Summary38

Coefficients of the Regression Model39

Regression Equation39

Coefficient of Correlation40

Discussion on Past Studies41

Growth of economy41

Factors Affecting Growth of economy in Developing Countries42

CHAPTER 5: CONCLUSION44

Growth of economy45

Recommendations45

Further Areas for Research46

REFERENCES47

CHAPTER 1: INTRODUCTION

Background of the Study

Overview

Nigeria could be considered as a medium income with features of mixed economy with a growing market. Nigeria's services, communications, financial and entertainment sectors are expanding day by day. According to the statistics of 2011, the gross domestic product (GDP) ranking of the country turned out to be thirty. Major advances have occurred in the manufacturing sector with many multinational companies investing in the manufacturing sector of the country (IMF, 2011, pp. n.d.). Nigeria has been attributed with producing a vast number of goods and services for many Western African countries (Okogu, 2011).

Different Sectors in Nigerian Economy

Nigeria has a diverse range of resources. The country is rich with human resource, natural resources and a potential target market. All major sectors of the Nigerian economy struggled for the first four decades after its inception. The structure of its economy also remained quite stagnant and heavily dependent on the performance of the oil sector. The equally large subsistent agricultural sector failed to cope up with the rapid increase in the country's population and caused the once exporters of food to start importing food (Serven, 2003, pp. 212). The various Inter-sectoral links continue to remain weak; also the rate of unemployment is increasing everyday.

Many experts suggest that both the foreign as well as the domestic malfunctions attribute to the condition of the economy. The country has become overly dependent on the oil sector of the country. The situation has also induced law and order situation, political instability and poor macroeconomic management. Years of military rule in the country has also contributed to the mismanagement of its resources and ...