An Investigation of the Impact of Foreign Direct Investment on Economic Growth in Nigeria: A Rigorous Approach

Abstract

The work at hand makes the proposition that in-depth or rigorous analyses are required to investigate the impact of foreign direct investment (FDI) on the economic growth and development of Nigeria. Currently, development literatures are fraught with a single regression model that pretends to predict the complex interplay between growth variables as well as the manifold and intractable regression problems that plague ordinary least squares (OLS) estimates. We posit that the pragmatic, observant, delicate, curious and refinement spirit, common among experimental scientists, should be cultivated by FDI-growth empirical analysts to arrive at time and researchers invariant results. Using the data from one of the publications (Abu and Echegbulu, 2011) which employed only a single equation model in their FDI-growth studies, we demonstrate that rigorous tests of significance vis-a-vis several models are needed to arrive at a correct, clear and indisputable conclusion on the linkage between FDI and economic progress.