International Journal of Research and Innovation in Social Science (IJRISS) | Volume III, Issue VIII, August 2019 | ISSN 2454–6186

Factors Influencing Foreign Direct Investment in Nigeria (Case Study Nigerian Oil and Gas Sector)

Richard Nwachukwu
University of Uyo, Nigeria

Abstract:-This study examines the variables that influence foreign direct investment in Nigeria using the Nigerian Oil And Gas sector as case study. Noting that there is significant evidence on the link between FDIs and economic growth in the Oil and Gas sector, the results submitted by researchers in the field of FDI determinants and the impact of FDI determinants in this sector are still not clear. Following this, the study identified underlying Human capital factors that affect the flow of FDI into the sector while taking note of the infrastructural and policy factors affecting FDI flow. The study adopts a survey research design where a self-structured questionnaire was administered to senior and junior staff of the multinational oil and gas companies in Nigeria to establish the relationship that exists between FDI determinants and the growth of Nigerian oil and gas industry. Data collected was analyzed using frequency charts and percentages while Chi-square was used to test the study hypothesis. From the study findings, it was revealed that human capital factors and infrastructural factors have a significant effect on flow of foreign direct investment into the oil sector. Also the findings show that the relationship between flow of FDI into Nigeria’s oil sector and growth of the economy is significant also. Therefore FDI is an important instrument for growth of the economy. The study further recommended that MNC entering the sector should engage itself in the field where it can make a difference through quality, low cost and the Market analysis for of MNC should be geared towards obtaining competitive advantage.

I. INTRODUCTION

Foreign Direct investment (FDI) is a direct investment by way of a company in a industrial undertaking in another country. Mallampally and Sauvant outline FDI as an investment via multinational corporations in foreign countries so one can assets and manage production activities in an international locations (1999). It plays an brilliant and growing position in global business by means of imparting a company with new markets and advertising and marketing channels for their merchandise. For a host countries or the foreign firm which receives the investment, it gives a source of latest technology, capital, procedure, merchandise, organizational technologies and modern management practices. All of these are presumed to make contributions to economic boom and development in an economy. FDI is essential not just for the developing countries however also for developed nations.