This paper aims to empirically explore the asymmetric relationship between corruption control and foreign direct investment (FDI) in Nigeria.
The study utilized the non-linear autoregressive distributed lag (NARDL) bounds test technique for the time-series analysis covering the period 1984-2017.
The findings reveal that corruption inhibits FDI inflow and corruption control has asymmetric effects on FDI inflow to Nigeria. The coefficient of positive shock or changes in respect of corruption control is positive as well as statistically significant during the long run, while the coefficient of negative shock is negative, but statistically insignificant. This implies that improvement in corruption control encourages inflow of FDI to the country, whereas a decrease in corruption control has an insignificant effect.
Nigeria needs to intensify its corruption control efforts to effectively enhance the conduciveness as well as attractiveness of its business operating environment for FDI inflow.
This paper is among the first to use time-series analytical process to empirically verify the asymmetric association of corruption control and FDI inflow in Nigeria. In this regard, the insight generated by outcomes of the study will enable specific inferences to be drawn from the empirical findings by policy makers, academic researchers and business practitioners.
