Relationship between foreign direct investment and economic growth in developing countries

This research proposal explores the relationship between foreign direct investment and economic growth in developing countries, with a focus on Nigeria. It discusses the research objectives, literature review, and research methodology. The proposal aims to identify the role of FDI in economic growth, factors contributing to a country's benefit from economic growth, and the current situation of FDI in Nigeria.

Research proposal

Table of Contents
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MAIN BODY...................................................................................................................................2
REFERENCES ...............................................................................................................................8
Books and journals ......................................................................................................................8

MAIN BODY
“Relationship between foreign direct investment and economic growth in developing
countries” A study on Nigeria.
Foreign direct investment can be defined as investment made by the firm or organisation
in the other country into a business (Owutuamor and Arene, 2018). FDI take place when investor
establish a foreign business operation or acquire or foreign business assets in foreign company. It
is a research report which is based on the aim of relationship between foreign direct investment
and economic growth in a developing country. It consist a discussion on research objectives, a
literature review with research methodology. The main objectives of this research proposal are
identify the role of foreign direct investment in economic growth of developing country, identify
factors contribute to how much a country will benefit from economic growth and identify the
current situation of FDI in Nigeria.
For achieving this and formulation of dissertation in effective manner, this proposal
consider three research question on which literatures are reviewed. these are What are the role
of foreign direct investment in economic growth of developing country, What are factors
contribute to how much a country will benefit from economic growth and What is the current
situation of FDI in Nigeria.
The present research proposal is based on laid research questions that will be further
describe to focus on achievement of laid objectives. The research will be beneficial for
understanding the unexpected consequences of Nigeria that may affect them in long run. The
application of data and theory will be used for predicting the future Nigeria economic growth.
The data of developing countries will be used for supporting the benefits from foreign countries.
All this information will assist in development of insights of unexpected consequence of Nigeria
that may affect them in long run.
According to the viewpoint of (John, 2016) Nigeria third host country which attract FDI in
African continent. It is behind Egypt and Ethiopia and attracting FDI on African continent.
Author also state set country is among the most promising rules for growing in Africa and
attracts number of investors towards the economy and the sector. It covers hydrocarbon energy
building and many other sectors. Father also state that according to the report published in 2020
by UNCTAD 2020 world investment report, the flow of FDI in Nigeria is amounted to total of

USD 3.3 billion in 2019 which is showing that 48% decline in comparison to the previous year.
It is also seen that the total stock of FDI in Nigeria is estimated around USD 98.6 billion in 2019.
According to the point of view of (Jibrilla, 2018), it is necessary to analyse the role of
foreign direct investment for economic growth of developing country that help in increasing
growth in future period of time. It is necessary to have FDI that is necessary for economic
growth in host economy. It imposes direct impact on country during particular phase of time
period. The FDI is significant source of external finance that helps in developing country in
conducting different functions and operation in an appropriate manner. It is differ from different
kind of flow of external private capital that help investor in increasing profit margin as well as
productivity levels during particular phase of time period. The FDI imposes direct impact on
country and it increases productivity level in future period of time. Hence, it is necessary to
analyse the role of FDI in economic growth of improving country. In addition to this, FDI is
important for improving economy & emerging market requires funding that helps in expanding
or boosting sales in international market. The investment in infrastructure, resource, and energy
is important for economy as it assists in increasing jobs opportunities and many more. In addition
to this, it is necessary to make effective FDI in order to contribute towards economic growth. It
is analysed that, FDI is important for the economic growth of host and developing economy. It is
necessary to maintain relationship with foreign country in order to invest money within
developed country that help in providing educated workforce and improve financial market
during particular phase of time period. The process of FDI imposes direct impact on host
economy and that help in completing research in an appropriate manner. Their main purpose is to
make appropriate investment in conducting research in better way. The main focus is on
collecting data, improving financial market and educated workforce that help company in
boosting its growth in future period of time. The foreign investment take too much risk but it
help in increasing the financial market, educated workforce and many more that help in
performing different functions related to research in an appropriate manner. Hence, through FDI
the flow of money from rich country to developing nation help in providing support to individual
person during particular phase of time period. Therefore, the foreign direct investment is helpful
in increasing success or growth of the company during particular phase of time period. Apart
from this, the main focus is to make foreign direct investment that help in increasing growth of
developing country which is useful in increasing productivity level in future period of time. It

imposes direct impact on companies and it is necessary to make foreign direct investment to
increase profitability in future period of time. In addition to this, FDI is important for improving
economy & emerging market requires funding that helps in expanding or boosting sales in
international market. The investment in infrastructure, resource, and energy is important for
economy as it assists in increasing jobs opportunities and many more.
According to view point of (Enisan, 2017) Foreign direct investment is essential part of
every economy which play various positive impacts on the functioning of economy and
achievement of goals and objectives in a timely manner. Various studies show that increasing
FDI inflow within the economy health in GDP growth for a longer period of time as well as
improve the functioning of the developing economy such as Nigeria. FDI brings number of
positive impact on the economy. This is because they directly influence trade in an economy.
FDI influence economic growth of an economy by increasing the total factors of productivity and
efficiency of the resources by the use of functions in a host country. In context of developing
nation like Nigeria, help in increasing the capital stocks of the economy and raise the output. The
mean trade-related benefit of FDI is that it contributes to integration of the host country in the
global economy and help in boosting the foreign trade flow the establishment of appropriate
transitional distribution network. Author also stated that FDI also contribute towards building the
human capital in developing countries as significance. This is because it helps in reducing the
unemployment by increasing the employment chances. This is because by the increase in FDI
within the developing countries such as Nigeria it can seem that it provides the higher wages and
working conditions due to higher productivity and explaining a greater technology for using the
new and model working systems and management skills. Is all is helpful in increasing the
productivity of the employees within the market and selling the products in hypermarkets. This
also contributes towards the transfer of technology and management knowledge to one place to
another which increase the competitiveness within the employees and developing countries.
FDI is also significant for influencing the competition level within the developing country.
It can be seen from the example of Nigeria where the present MNS assist the economic
development by stimulating the domestic competition and leading the higher productivity and
innovation within functioning. This is helpful in efficient allocation of resources by the
organisation and managing proper functioning level. FDI also help in acquisition of the local
firms which help in increasing the management level and corporate governance. This is because

foreign direct investment generally imposed its own company policies which are related to
policies followed by multinational organisation. This kind of organisation also includes
international reporting system and principle of information disclosure which help in improving
the business environment and developed the corporate efficiency with the firm. This is also
helpful in managing the investment accordingly and improving the economic conditions were
contributing towards the taxation system GDP growth as well as increasing the other atical
governance practices. Number of mncs who bring foreign direct investment to the country like
Nigeria where is the corporate transparency and assess the fight against corruption system within
the country. Is it provide resources to developing Nations such as capital technology managerial
skills and entrepreneurship opportunity and brand value help in boosting the industrialisation
process and create number of jobs. This is helpful in managing the poverty and increasing
country level to compete with different economies at developing level.
In relation to conducting this research there is use of Research methodology. It is
considered as a source that helps in accomplishing positive results in future time period. It is
determined as a research that offers an idea in respect of procedure and techniques used for
implementing investigation. The research methodology involves design of research, research
philosophy as well as many more that will lead to coordinating various activities that is
connected to research by assessing strategy that is appropriate. The technique will be used in the
future investigation of research which include Research Design, Research philosophy, Type of
Investigation, Research approach and Data collection are used under this.
Research Design it is considered as a more significant element that is adopted for
conducting research in better way that help in achieving positive results in future time period of
time. There are different or various types of resources like descriptive, experimental and
exploratory. In present research, there is a proper research that will be conducted for
accomplishing favourable outcomes in upcoming time period (Joshua, 2019).Research
philosophy there is various kinds of philosophy used by researcher for conducting research.
These are positivism and interpretive research. Herein, in present research interpretive
philosophy will be adopted for conducting research that will help in achieving positive results in
upcoming time period (Udemba, 2019)
Type of Investigation there is different kinds of Investigation that is used by investigator
such as quantitative and qualitative. There are various methods which are to be used for

conducting research in an appropriate manner. It will assist researcher to organise research that
help in achievement of favourable outcomes in upcoming time period. Research approach there
are various kind of approach that is related or connected to research that is Inductive and
deductive. The deductive research will help in analysing information that is totally depend on
figure, statistical data that will lead to achieving of favourable outcomes in future period of time.
Data collection it is determined as a method that is used in collecting data or information in
better way. In addition to this, in current research, the secondary data will be used for collecting
information that helps in conducting research in an appropriate manner. There are various
sources of secondary data such as books, papers, articles that will be analysed for the purpose of
conducting research in an appropriate manner (Ogunjimi and Amune, 2017).
In relation to present research there are number of assumptions which are related to
chosen topic. These are low availability of data, creditability of data. Creditability of data of
data is prime assumption in this report this is because there is use of various data sources and its
is difficult to judge there creditability of particular data sources. One more assumption under this
research is related to low availability of data. This is because there are restriction on some kind
of which is related top total investment in Nigeria These data is related to restricted function
which impact on organisation to achieve business objectives.
It can be concluded from the above mentioned information that FDI is important for our
country in relation to managing its functions and achieving the objectives. This can be seen that
FDI is helpful in increasing the productivity and plane positive impact and role within the
developing economy to achieve its objectives and fulfil the requirement.

REFERENCES
Books and journals
Enisan, A.A., 2017. Determinants of foreign direct investment in Nigeria: A Markov regime-
switching approach. Review of Innovation and Competitiveness: A Journal of Economic
and Social Research, 3(1), pp.21-48.
Jibrilla, A., 2018. Forecasting FDI Inflows from the United States (USA) to Nigeria over Ten
Years Period. INTERNATIONAL JOURNAL OF ECONOMICS AND FINANCIAL
MANAGEMENT, 3(3), pp.51-58.
John, E.I., 2016. Effect of foreign direct investment on economic growth in Nigeria. European
Business & Management, 2(2), pp.40-46.
Joshua, U., 2019. An ARDL approach to the government expenditure and economic growth
nexus in Nigeria. Academic Journal of Economic Studies, 5(3), pp.152-160.
Ogunjimi, J. and Amune, B., 2017. Impact of Infrastructure on Foreign Direct Investment in
Nigeria: An Autoregressive Distirbuted Lag (ARDL) Approach.
Owutuamor, Z.B. and Arene, C.J., 2018. The impact of foreign direct investment (FDI) on
agricultural growth in Nigeria (1979-2014). Review of Agricultural and Applied
Economics (RAAE), 21(1340-2018-5169), pp.40-54.
Udemba, E.N., 2019. The triangular nexus causality among economic growth, trade, FDI and Oil
Price: time series analyses of Nigeria. OPEC Energy Review, 43(4), pp.470-491.