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| Role of Foreign Direct Investment on Employment Generation in Nigeria |
Adeyemi, Akeem Ademola, Hassan, Ajoke Esther, Adebisi, Rufus Olakunle, Adegbola, Muritala Makinde, Odetoyinbo, Yewande Odunayo
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Abstract:
This study is targeted at examine the role of foreign direct investment on employment generation in Nigeria. The objectives of this study include: to investigate the impact of FDI on employment; to examine the long-run linear relationship between FDI and employment in Nigeria; and to determine the direction of causality between FDI and employment level. The study therefore employed multiple regression, Johansen co-integration and causality to ascertain the specific objectives of the study. The instrument used for this study is secondary data. The data for the study was obtained from CBN Statistical Bulletin, 2019, National Bureau of Statistics, 2019, and World Bank indicators, 2019. Stata- 12 statistical package was used for the estimation. The result of the multiple regressions suggests that wage has a negative and significant impact on employment, while Gross Domestic product is significant and positive as well. The study further shows that foreign direct investment has a significant but negative impact on employment, Also, the result shows that, real exchange rate is a negative and non-significant determinant of employment in Nigeria while, inflation rate is a positive but not a significant determinant of employment. The ADF statistic confirms that the long run relationship is significant at 1%. The results show that, FDI significantly causes employment but employment does not significantly cause FDI. The study therefore recommends that policies should be formulated to exploit the role of FDI on employment in Nigeria in an attempt to reduce unemployment rate.
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