ON THE CAUSAL LINKS BETWEEN FOREIGN DIRECT INVESTMENT AND ECONOMIC GROWTH IN NIGERIA, 1970-2008: AN APPLICATION OF GRANGER CAUSLITY AND CO-INTEGRATION TECHNIQUES

Abstract

This paper examines the causal links between foreign direct investment and economic growth in Nigeria during the period 1970-2008. The authors employed the Granger causality and Johansen co-integration techniques to analyze the relationship and direction of causality between the variables. The Johansen co-integration statistic indicates that the variables are co-integrated, and the granger causality statistic reveals a unidirectional causality running from foreign direct investment to economic growth.

Keywords

• foreign direct investment
• economic growth
• grangercausality
• co-integration