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A Developing Country’s Absorptive Capacity: The Link between FDI and Economic Growth in Nigeria

DOI: 10.4236/oalib.1102137    854 Downloads   1,983 Views   Citations
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ABSTRACT

Developing countries’ surest route to sustained poverty reduction is economic growth. Policymakers encourage foreign direct investment (FDI) for the enhancement of productivity in-country and the promotion of economic development, through the “multiplier” effect. It is generally agreed among researchers that local conditions (absorptive capacities) are important factors contributing to the effect of FDI on economic growth. FDI has contributed to output growth in Nigeria, especially in the petroleum sector, where even more FDI should now be encouraged through investor incentives. However, the efficacy of FDI in generating the desired growth may be limited by the level of infrastructural and human capital development in Nigeria.

Conflicts of Interest

The authors declare no conflicts of interest.

Cite this paper

Omoregie, U. (2015) A Developing Country’s Absorptive Capacity: The Link between FDI and Economic Growth in Nigeria. Open Access Library Journal, 2, 1-6. doi: 10.4236/oalib.1102137.

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