Empirical Analysis of the Impact of the Exit of Multinational Corporations on Economic Growth in Nigeria from 1990-2023

Abstract

The study analyzed the impact of the exit of multinational corporations on economic growth in Nigeria. The specific objectives of the study were to: Analyze the effect of the exit of foreign direct investment on Nigeria’s economic growth. To identify factors responsible for the exit of multinational corporations in Nigeria. To examine ways multinational corporations can be managed to enhance economic growth in Nigeria. The study analyzes empirical data from 1990 - 2023 by applying time series analysis techniques, Using least square methods to ascertain the linear relation between the variables. Unit root test to determine whether the variables are stationary or non-stationary. Cointegration test to determine the long-run equilibrium between the variables, and a Vector Error Correction Model (VECM) which analyzes the relationship between multiple time series variables that are cointegrated in the long run and captures short-run deviations from the long-run equilibrium. Data were
sourced from World Bank data base. Based on the findings, the study concludes that foreign direct investment and interest rates have a significant impact on Nigeria's Gross Domestic Product. Real exchange rate and inflation rate has significant impact on the exit of multinational corporations in Nigeria which also has negative impact on Nigeria’s GDP. Therefore we conclude that the exit of multinational corporations have significant impact on economic growth in Nigeria. The study recommends that it is important for government to genuinely tackle insecurity, provide infrastructure and formulate policies that will strengthen the value of Naira, protect both local and multinational corporations and then host communities as well, creating an enabling environment for the ease of doing business in Nigeria thereby minimizing the exit of multinational corporations and also utilized interest rate to enhance economic growth.