Tax and Foreign Direct Investment in Nigeria: A Dynamic Estimation Approach
0
조회
0
다운로드
0
인용
0
참고문헌
키워드
초록
This paper empirically investigates the nexus between tax and foreign direct investment (FDI) in Nigeria, over the period 1986-2020. Employing the dynamic system GMM estimation technique, the findings show that a high tax regime has a destabilizing effect on FDI inflows. Lagged FDI (a measure of agglomeration effects, relating current FDI to past FDI inflows) is positively and significantly related to FDI. Growth rate of real GDP (a measure of economic size) is positively and significantly related to FDI. It is also evident that infrastructure has a positive but weak impact on FDI. The paper recommends institutional reforms in tax to entrench an investment- friendly environment, as well as increased infrastructure investment spending, particularly, ICT, and a stable political and macroeconomic environment to stimulate FDI inflows to Nigeria.
Abstract
This paper empirically investigates the nexus between tax and foreign direct investment (FDI) in Nigeria, over the period 1986-2020. Employing the dynamic system GMM estimation technique, the findings show that a high tax regime has a destabilizing effect on FDI inflows. Lagged FDI (a measure of agglomeration effects, relating current FDI to past FDI inflows) is positively and significantly related to FDI. Growth rate of real GDP (a measure of economic size) is positively and significantly related to FDI. It is also evident that infrastructure has a positive but weak impact on FDI. The paper recommends institutional reforms in tax to entrench an investment- friendly environment, as well as increased infrastructure investment spending, particularly, ICT, and a stable political and macroeconomic environment to stimulate FDI inflows to Nigeria.
참고문헌 (24)
- Adetiloye, K. A., "Domestic Investment, Capital Formation and Population Growth in Nigeria", Developing Country Studies, 2(7), pp.37~44 (2012)
- Arellano, M., "Another Look at the Instrumental Variable Estimation of Error-Components Models", Journal of Econometrics, 68, pp.29~51 (1995)
- Atoyebi, K. O., "The Determinants of Domestic Private Investment in Nigeria", Journal of Humanities and Social Science, 2(6), pp.46~54 (2012)
- Ayanwu, J. C., "Regional Comparison of Foreign Direct Investment to Africa : Empirical Analysis", African Development Review, 27(4), pp.345~363 (2015)
- Blundell, R., "Initial Conditions and Moment Restrictions in Dynamic Panel Data Models", Journal of Econometrics, 87, pp.115~143 (1998)
- Infrastructure and Economic Development in Sub-Saharan Africa, "Calderon, C.", World Bank, ~, pp.Policy Research Working Paper No.4712 (2008)
- Chen, K., "Option-Based Pricing Theory of Investment", Journal of Monetary Economics, 55(2), pp.165~180 (2003)
- Djankov, S., "The Effect of Corporate Taxes on Investment and Entrepreneurship", American Economic Journal: Macroeconomics, 2, pp.31~64 (2010)
- Determinants of Corporate Investment in China: Evidence from Cross-country Firm Level Data, "Geng N.", IMF, ~, pp.Working Paper WP (2012), 12[DOI]
- Corporate Taxation and the Productivity and Investment Performance of Heterogeneous Firms: Evidence from OECD Firm-Level Data, "Gemmell, N.", Fundación de Las Cajas de Ahorros, ~, pp.Documento de Trabajo, 527 (2010)
- Hall, R. E., "Tax Policy and Investment Behavior", American Economic Review, 57 (1967)
- Foreign Direct Investment Inflows to Nigeria, "IMF", IMF, ~ (2019)
- Jorgenson, D., "Capital Theory and Investment Behaviour", American Economic Review, 53(2), pp.247~259 (1963)
- Liu, L., "Do Taxes Distort Corporations’ Investment Choices? Evidence from Industry-Level Data", International Institute of Public Finance (IIPF) Annual Conference (2011), University of Michigan
- Miao, J., "Lumpy Investment and Corporate Tax Policy", Journal of Money, Credit and Banking, 46(6), pp.1171~1203 (2014)
- Mijiyawa, A. G., "What Drives Foreign Direct Investment in Africa? An Empirical Investigation with Panel Data", African Development Review, 27(4), pp.392~402 (2015)
- Ozekhome, H. O., "Does Democratic Institutions and Foreign Direct Investment Affect Economic Growth: Evidence from Nigeria?", Oradea Journal of Business and Economics, 2(2), pp.27~36 (2017)
- Philippon, S., "Policy Instruments in Cost of Capital Theory", Journal of Macroeconomic Theory, 72(96), pp.89~102 (2007)
- The Investment Decision: A Re-examination of Theories Using Panel Data, "Samuel, C.", World Bank, ~, pp.World Bank Policy Research Working Paper No.1656 (1996)
- Schwellnus, C., "Corporate Tax, Investment and Firm Productivity", Journal of Economic Perspectives, 56(4), pp.270~288 (2008)
- Soyinbo, A., "The Savings Private Investment Process in Nigeria : An Empirical Study of the Supply Side", African Economic Research Consortium, 3(27), pp.1~16 (2000)
- World Investment Report- Reforming International Investment and Governance, "UNCTAD", ~ (2015)
- FDI Inflows in Nigeria: Trend and Facts, "UNCTAD", ~ (2019)