Exchange Rate Volatility on Investment and Growth in Nigeria, An Empirical Analysis

Adelowokan Oluwaseyi A

Authors

Adelowokan Oluwaseyi A

Keywords:

exchange rate, volatility, investment, VAR

Abstract

This paper examines the effect of exchange rate volatility on investment and growth in Nigeria over the period of 1986 to 2014. The vector error correction method, impulse responses function, co-integration and Augmented Dickey Fuller (ADF) test for stationarity were employed to capture the interactions between the variables. The results confirm the existence of long run relationship between exchange rate, investment, interest rate, inflation and growth. Finally the results show that exchange rate volatility has a negative effect with investment and growth while exchange rate volatility has a positive relationship with inflation and interest rate in Nigeria. Based on our findings, we recommended that the policy makers should developed sound exchange rate management system in the country potent enough for better growth in the economy.

Downloads

How to Cite

Exchange Rate Volatility on Investment and Growth in Nigeria, An Empirical Analysis. (2015). Global Journal of Management and Business Research, 15(B10), 21-30. https://journalofbusiness.org/index.php/GJMBR/article/view/1862

Download Citation

References

Akpan, Atan (2012) Effects of Exchange Rate Movements on Economic Growth in Nigeria. 2(2).

Gerald, Nwadike (1983) Monetary Policy Variables Relevance on Balance of Payments Adjustment in Nigeria 1980-2020. 07(08).

Akeju Kemi (2014) Real Exchange Rates , Terms of Trade and Economic Growth in Nigeria ( 1980-2012. 8(2), 19-23.

Shehu Aliyu (2011) Exchange Rate Volatility and Export Trade in Nigeria: An Empirical Investigation.

G Axel, L Inessa, Alexei (2014) The Dynamics of Exchange Rate Volatility: A panel VAR approach. The dynamics of exchange rate volatility: A panel VAR approach. 33, 1-27.

U Benson, E Victor (2012) Real Exchange Rate and Macroeconomic Performance: Testing for the Balassa-Samuelson Hypothesis in Nigeria. 4(2), 127-134.

G Chaudhary, S Shah, M Bagram (2012) Do Exchange Rate Volatility Effects Foreign Direct Investment? Evidence from Selected Asian Economies. 2(4), 3670-3681.