European Journal of Accounting, Auditing and Finance Research (EJAAFR)

EA Journals

FDI inflows

Foreign Direct Investment and Infrastructure Development in Nigeria: Assessing Government Capital Expenditure (Published)

This study examines the relationship between Foreign Direct Investment (FDI) and infrastructure development in Nigeria, focusing on government capital expenditure. The research considers FDI inflows, FDI outflows, and remittance inflows as independent variables, while government capital expenditure serves as the dependent variable. Using an ex-post facto research design, the study covers the period from 1991 to 2021, relying on secondary data obtained from the Central Bank of Nigeria (CBN) Statistical Bulletin. A multiple regression analysis was conducted to assess the impact of these financial inflows on capital spending. The findings reveal that FDI inflows (p-value: 0.0055) significantly contribute to increased government capital expenditure, whereas FDI outflows (p-value: 0.4081) exhibit a positive but statistically insignificant effect. Additionally, remittance inflows (p-value: 0.0000) show a substantial positive impact on capital expenditure. These results suggest that foreign investment and remittances play a crucial role in shaping Nigeria’s infrastructure development. Given these insights, the study recommends that the government implement policies to enhance investment attractiveness, particularly by addressing security challenges and creating a stable economic environment. Moreover, initiatives should be put in place to encourage both domestic and foreign investors to engage in infrastructure projects that yield long-term economic benefits.

 

Keywords: FDI inflows, FDI outflows, Foreign Direct Investment (FDI), Nigeria, government capital expenditure, infrastructure development, remittance inflows

The Relationship between Tax Burden and Foreign Direct Investment Inflows: A Review of Empirical Literature (Published)

This study reviews literature on the relationship between tax burden and foreign direct investments (FDI) inflows across the world. Various empirical research have found contradicting outcomes of the relationship between tax burden and FDI inflows. This study aims to establish the dominant relationship between tax burden and FDI inflows. Taxation components such as tax system, tax types, tax rates, tax base, tax structures affect the amount of tax revenues collected hence the tax burden. Therefore, in this study, tax burden was represented by itself and taxation components. The research found literature has two divergent relationships between tax burden and FDI inflows: negative and none. However, the relationships largely depended on the taxation components and country or economic region under study. The research findings demonstrate that world over there is no universal consensus on the relationship between tax burden and FDI inflows. Therefore, tax competition theory, which proposes that there is inverse relationship between tax burden and FDI inflows may not be applicable universally. The research implication is that the paper has demonstrated that inverse relationship between tax burden and FDI inflows is not universal. There is need to establish the relationship between tax burden and FDI inflows in any specific country or economic region. Countries that rely on the presumptive inverse relationship between tax burden and FDI inflows to shape their tax policy to attract FDI inflows should rely on empirical research findings undertaken in the country or economic region. The research recommends empirical studies on the relationships between tax burden and/or taxation components, and FDI inflows in specific countries and economic regions.

Keywords: FDI inflows, Tax Burden, Taxation

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