Analysis of the Effects of FDI and Remittance on Economic Growth: Empirical Evidence from Nigeria

Abstract

Foreign direct investment (FDI) and remittances are two major
sources of capital formation and their impact on economic growth
has received significant attention in the literature. However, the
impact of FDI and remittances on growth is mixed for their ability to
boost growth, improve productivity, and alleviate poverty especially
in developing countries, including Nigeria. Thus, this study
investigates the effects of foreign direct investment (FDI) and
remittances on economic growth (GDP) in Nigeria. Secondary data
were obtained from the World Bank database spanned from 1981 to
2021. ARDL technique was applied to investigate the association
among the variables. The findings indicate that both FDI and
remittances have a statistical significance effect on GDP. This
suggests that FDI and remittance inflows contribute to Nigeria’s
economic growth. The impactful effects of the regressors signal
important policy implications suggested in this study.