BINUOMOYO, Olayinka Kehinde
Department of Finance
School of Management Sciences
Babcock University, Ilishan-Remo, Ogun State, Nigeria
olayinka.binuomoyo@gmail.com
AJIKE, Emmanuel O. (Ph.D)
Department of Business Administration & Marketing
School of Management Sciences
Babcock University, Ilishan-Remo, Ogun State, Nigeria
OWUALAH, Sunday I. (Prof.)
Department of Finance
School of Management Sciences
Babcock University, Ilishan-Remo, Ogun State, Nigeria
ABSTRACT
This study examines the long-term and causal relationship between foreign direct investment (FDI) and
poverty level in Nigeria, employing an annual time series data from 1990–2022, analysed using the
autoregressive distributed lag (ARDL) bounds testing approach and Granger causality test. The results
confirm that FDI exerts a positive short- and long-run impacts on poverty level (ẟ = 0.737, t = 0.288, p =
0.776) in Nigeria which is unsavoury, though these relationships are insignificant. Also, the results of
Granger causality indicate that FDI and poverty level do not cause each other, which confirms no
causality relationship between the two variables. Further insight shows that FDI inflation tends to push
up the poverty level in Nigeria and could be responsible for the unsavoury outcome of the FDI-poverty
level relationship. It is therefore recommended for the government to take decisions related to
addressing the country’s macroeconomic stability in order for foreign investments to have the desired
impact on poverty level in the country.
Keywords: ARDL, FDI, Granger causality, Nigeria, Poverty