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Journal of Empirical Studies

June 2018, Volume 5, 1, pp 1-11

Disaggregated Foreign Capital Inflows and Economic Growth in a Developing Economy: Empirical Evidence from Nigeria

Onyinye I. Anthony-Orji


Anthony Orji


Jonathan E. Ogbuabor


Emmanuel O. Nwosu

Onyinye I. Anthony-Orji 1 Anthony Orji 1 ,
Jonathan E. Ogbuabor 1 Emmanuel O. Nwosu 1 

  1. Department of Economics, University of Nigeria, Nsukka, Nigeria 1

Pages: 1-11

DOI: 10.18488/journal.66.2018.51.1.11

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Article History:

Received: 03 October, 2018
Revised: 07 November, 2018
Accepted: 05 December, 2018
Published: 31 December, 2018


This study estimates the impact of Foreign Capital Inflows on economic growth in Nigeria from 1986Q1 – 2014Q4. For empirical analysis, the paper adopts the Auto-Regressive Distributed Lag- Unrestricted Error Correction Model (ARDL-UECM). Empirical evidence from the ARDL-bounds Co-integration Test shows there is co-integration between Economic Growth (proxied by Growth rate of Real Gross Domestic Product) and Foreign Capital Inflows (disaggregated into Foreign Direct Investment, Foreign Portfolio Investment and Workers’ Remittances) in Nigeria. The results also show that apart from remittances, other components of Foreign Capital Inflows have significant impact on Economic Growth in Nigeria. The study therefore recommends that Government should, alongside other economic activities, provide an enabling economic environment for more Foreign Capital Inflows. Also the financial sector should be improved so that workers’ remittances can be efficiently tracked through the banking channels and also put to productive use. This is how to minimize the negative impact of workers’ remittance inflows into Nigeria.
Contribution/ Originality
This study contributes to existing literature as one of the recent empirical papers that focus on the disaggregated impact of Foreign Capital Inflows on economic growth in Nigeria using the framework of the Auto-Regressive Distributed Lag- Unrestricted Error Correction Model (ARDL-UECM).


ARDL, Foreign capital inflows, FDI, Foreign private investment Remittances, Economic growth.


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This study received no specific financial support.

Competing Interests:

The authors declare that they have no competing interests.


All authors contributed equally to the conception and design of the study.

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