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IMPACT OF FOREIGN DIRECT INVESTMENT ON

UNEMPLOYMENT IN NIGERIA (1980-2007)

BY
www.projects.page4.me
(08034883821 08188988835)


TABLE OF CONTENT
Title i
Certification ii
Dedication iii
Acknowledgement iv
Abstract viii
Chapters
CHAPTER ONE: INTRODUCTION
1.1 Background to the Study 1
1.2 Statement of the Problem 4
1.3 Significance of the Study 5
1.4 Objectives of the Study 7
1.5 Hypotheses of the Study 7
1.6 Scope and Methodology 8
1.7 Limitation of the Study 9


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CHAPTER TWO: LITERATURE REVIEW
2.1 Foreign Direct Investments: Conceptual Issues 10
2.2 Determinants of Foreign Direct Investments Flows 13
2.3 Trend in Foreign Direct Investment Flows in Nigeria 19
2.4 Unemployments Conceptual Issues 22
2.5 Determinants of Unemployment 26
2.6 Trend in Unemployment in Nigeria 32
2.7 Foreign Direct Investment and Unemployment:
Theory and Evidence. 34
CHAPTER THREE: THEORETICAL FRAMEWORK
3.1 Sources of Data and Method of Analyses 37
3.2 Model Specification 37
CHAPTER FOUR: EMPIRICAL ANALYSES
4.1 Presentation of Empirical Results 41
4.2 Discussion of Empirical Results 42
CHAPTER FIVE: SUMMARY, RECOMMEDATION AND
CONCLUSION
5.1 Summary of Findings 46
5.2 Recommendations 47
5.3 Conclusions 49
Bibliography 51
Appendix

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ABSTRACT
This study investigated the Impact of foreign direct investment on
unemployment in Nigeria from the period 1980 to 2007.
The study was carried out empirically using the Ordinary Least Squares
method of regression analysis; alongside other statistical tests.
Empirical results obtained revealed that government expenditure is a
poor determinant of unemployment, while foreign direct investment
inflow is the most germane determinant of unemployment in Nigeria.
Hence to reduce the spat of unemployment in Nigeria, policy emphases
should be centered on attracting greater inflows of foreign direct
investment.

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CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND TO THE STUDY
The world economy is growing on the strength of globalization.
One of the most salient features of globalization drive is the conscious
encouragement of cross-border investments, especially by trans-
national corporations and firms. Thus many countries and continents
(especially developing) now see the attraction of foreign direct
investment as an important element in their strategy for economic
development, essentially because it is seen as an amalgamation of
capital, technology, marketing and management (Sjoholm, 1999).
Foreign direct investment is an investment made to acquire a
lasting management interest in a business enterprise operating in a
country other than that of the investor, defined according to residency
(World Bank, 1996). Such investments may take the form of either
Greenfield investment (also called mortar and brick investments)
or merger and acquisition which entails the acquisition of existing
interest rather than new investment.
In corporate governance, ownership of at least 10% of the
ordinary shares or voting stock is the criterion for the existence of a
direct investment relationship, while ownership of less than 10% is

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recorded as portfolio investment. Furthermore, foreign direct
investment comprises not only mergers and acquisitions and new
investments, but also reinvested earnings and loans and similar
capital flows or transfers between parent companies and their
affiliates. It has been posited that a countrys inward foreign direct
investment position is made up of the hosted foreign direct investment
projects, while outward foreign direct investment comprises those
investment projects owned abroad.
One of the strongest strengths of foreign direct investment arises
from the positive externalities if generates from the positive
externalities it generates from forward and backward linkages or
through industrial acceleration as being currently experienced in the
South and East Asia. This is evident because it is less volatile and
resilient to perturbations in the economy.
Africa is in dire need of foreign direct inflows owing to its
acknowledged advantages. Hence one of the pillars on which the New
partnership for Africas Development (NEPAD) was launched, was to
increase the available capital inflows through a combination of
reforms, resource mobilization and a conducive environment for
foreign direct investment (funke and Nsouli, 2003).
Finally, in Nigeria the level of foreign direct investment attracted
overtime is mediocre (Asiedu, 2003),as compared with her resource

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base, potential need; especially in limiting unemployment growth rate,
, and in relation to the policy framework initiated in the past.

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