AN ASSESSMENT OF THE IMPACT OF FDI ON SME GROWTH IN NIGERIA

Date

2013-12-12

Journal Title

Journal ISSN

Volume Title

Publisher

Department of Banking and Finance, Nasarawa State University Keffi

Abstract

Foreign Direct Investment (FDI) is widely believed to impact positively on Small and Medium Enterprises (SMEs) particularly in developing economies. This paper assesses the impact of FDI on SME growth in Nigeria. The Engel-Granger Error correction model is used to estimate the co-integrating relationship between FDI and SMEs proxied by the contributions of the Agric sector and wholesale retail sector to GDP. While FDI has a positive and significant relationship with the wholesale retail sector, its impact on the agricultural sector is significant and negative. It is recommended that government should continue to create an enabling environment for attracting Foreign Direct Investment in view of its significant positive impact on SME growth in Nigeria With regard to SMEs in the agric sector where a negative impact is observed, Multinational companies (MNCj in Nigeria (especially those in the manufacturing sector) should be encouraged to source their raw materials locally while the government should ensure proper pricing of agricultural produce for the benefit off armers.

Description

Keywords

FDIs, SMEs, Economic Growth

Citation

Nwala, M.N. et. al. (2013). AN ASSESSMENT OF THE IMPACT OF FDI ON SME GROWTH IN NIGERIA

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