Foreign direct investment and manufacturing exports in Nigeria.

Abstract

The potential impact of foreign direct investment (FDI) on recipient and investing economies is of considerable policy interest (Pain and Wake/in, 1997). Important to the theory of foreign investment in Nigeria is the question whether foreign investors coming to Nigeria are marketseeking or export-driven. This finding is relevant to economic managers in the design and implementation of appropriate macroeconomic policies to attract FDJ. It is also relevant to investigate whether FD/ contributes to the overall capacity of developing economies to export. This study investigates the contribution of FD! to manufacturing exports in Nigeria. Using firm level data collected from 232 manufacturing firms in Nigeria, probit regression analysis revealed that FD/ does not significantly contribute to manufacturing exports in Nigeria. This finding supports that of Soderbom and Teal (2002) and Nunnenkamp (2002) that FD/ in developing countries like Nigeria are not export-driven but are attracted by certain economic fundamentals within the economy like market size and the availability of natural resources.