Does Foreign Portfolio Investment Affect Employment Growth in Nigeria?

Abstract

In the wake of rising unemployment in Nigeria, and seeming helplessness on the part of government, the need has arisen to explore even non-traditional triggers of employment growth in the quest for solution. Portfolio investment was chosen on account of its pivotal role in the development of financial market, itself a primary facilitator of employment and investment. Using single equation, reduced form specification, and employing data for the period 1980 to 2014, it was found that in the long term, portfolio investment impacts employment growth positively and significantly. This outcome supports the general view in the literature of a positive relationship between portfolio investment and economic growth, and calls attention to this variable which has hardly been considered in employment generation constructs on account of its famed volatility and risk. Closer efforts to develop the Portfolio-Flow climate were recommended, in particular the cultivation of equity-end portfolio flow and stable foreign exchange regime.

Keywords: Portfolio investment, employment growth, unemployment

JEL Classification: E24 G11 G38