The Effects of Foreign Direct Investment Uncertainty on Financial Development in Nigeria: An Asymmetric Approach

Document Type : Research Paper

Authors

1 Faculty of Business Management, University Sultan Zainal Abidin, Malaysia Received: May

2 Faculty of Business Management, University Sultan Zainal Abidin, Malaysia

Abstract

This article investigates the dynamic effects of foreign direct investment uncertainty on financial development in Nigeria and the interacting role of financial inclusion and economic growth. We used the annual time series data of Nigeria covering the period 1970-2018. Through advanced econometric techniques, we first substantiated stationarity level and co-integration among the scrutinized variables, which is genuinely done for reliable findings. Following that, we applied Gregory and Hansen (1996) co-integration test, Non-linear ARDL as the elasticity estimator, and Diks and Panchenko (2006) causality test for the analysis. The Empirical evidence postulates the asymmetric nature of foreign direct investment uncertainty to financial development. We also found a non-linear uni-directional causality running from economic growth to financial development, foreign direct investment uncertainty to financial development, and financial inclusion to financial development. In the end, the authors proposed the needed policy recommendations to strengthen the Nigerian financial sector.

Keywords

References

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Interdisciplinary Journal of Management Studies (Formerly known as Iranian Journal of Management Studies)
Volume 14, Issue 2
April 2021
Pages 383-399

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