The purpose of this paper is to examine the foreign direct investment (FDI)–exports relationship in Nigeria using disaggregated FDI and export data.
This paper applies the autoregressive distributed lag cointegration approach in examining the long-run relationship between FDI and exports.
The results suggest that aggregate FDI has a positive and statistically significant long-run impact on total exports. Once exports are disaggregated into oil and non-oil exports, the positive, cointegrating relationship holds only for oil exports. When disaggregated by sector, primary sector and manufacturing sector FDI have a positive and significant long-run relationship with both total exports and oil exports but service sector FDI does not appear to have any significant influence on Nigerian exports.
This is the first paper that employs both sectoral FDI and disaggregated export data to examine the FDI–exports nexus in Nigeria.
