THE EFFECTS OF MACROECONOMIC RISK FACTORS ON FOREIGN DIRECT INVESTMENT IN NIGERIA.

Abstract

This study analyses how macroeconomic risk factors impact foreign direct investment in Nigeria. The data used covers the period from 1990 to 2021. Macroeconomic risk factors were measured by interest rates, exchange rates, trade openness, and GDP growth. The findings reveal that interest rates, exchange rates, trade openness, and GDP growth have no long-run effect on foreign direct investment. Furthermore, interest rates and trade openness have a significant positive short-run effect on foreign direct investment. The exchange rate has a significant negative short-run effect on foreign direct investment, while GDP growth has no significant short-run effect on foreign direct investment. The study recommends that the government create a positive economic environment to attract foreign investors.