Empirical Analysis of the Relationship between FDI, Technology Transfer and Economic Growth in Nigeria

Technology transfer (TT) and foreign direct investment (FDI) have been identified as an important conduit in the promotion of economic development. But many developing nations fear the opening up of their markets to competition and foreign investment. This paper empirically studies the relationship between FDI, TT and economic growth in Nigeria. Domestic investment (DI), human capital and the degree of openness are crucial variables used in this study mechanism. The acceptance of the twin concept of FDI and TT as a tool for economic growth and convergence in LDC has been a long item even by policy makers and economists in planning macroeconomic policy objectives and object of desired attainment. It is now a debate if exogenous or endogenous factors drive economic growth. Our objective for this research is to present the trend and ascertain the impact of FDI, technology transfer and openness of the Nigerian economy against domestic investment and the available human capital resource on economic growth. Analytical measure was used to present the trend of the variables and econometric methodology was used to provide empirical evidence on the impact of endogenous and exogenous variable in the Nigeria context. Conclusions from the findings were that domestic and external variables constitute economic growth. Furthermore, human capital was crucial for both domestic and foreign investment to strive. Technology transfer (TT) causes economic growth but international channels of TT did not favour economic growth. Similarly, degree of openness was found not to be a favourable channel; rather channels like University Industry (U-I), TT and taking intellectual properties to the market will propel economic growth. However, as macroeconomic activities increases with globalisation, there is the need to increase human capital investment effort and good foreign policies to make the foreign scene more additive to economic growth in the country.