Foreign Assistance and Economic Growth in Nigeria: The Two-Gap Model Framework
Bashir Olayinka Kolawole

This study examines the impact exacted by foreign assistance in the form of official development assistance (ODA) and foreign direct investment (FDI) on real growth in Nigeria over the period 1980 to 2011. Using the Two-Gap model and various econometric techniques which include Augmented Dickey Fuller (ADF) test, Granger causality test, Johansen co-integration test and Error Correction Method (ECM), empirical results reveal that there is Granger no-causality between any pair of the variables. Findings of the study also established a negative relationship between FDI and real growth as ODA exacts no impact on real growth in the country.

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