Foreign Direct Investment-Global Oil Price Nexus: A Comparative Analysis for both Nigeria and Morocco

Resumo

This study investigated the relationship between crude oil prices and foreign direct investment inflow in Nigeria and Morocco. The research was motivated
by the critical role of Foreign Direct Investment in driving economic growth and the perceived influence of oil price on investment decision. Utilizing data
from 1990 to 2022, the study employed Autoregressive distributed lag model (ARDL) and the Error correction (ECM) models to analyse the impact of oil
prices on Foreign Direct Investment. The findings revealed that in Nigeria, global oil price and inflation rate were the most significant factors affecting
foreign direct investment in both the short and long run. Oil price has a positive relationship with FDI while inflation rate has a negative relationship
with FDI. In Morocco, oil price, real gross domestic product and interest rate have a positive impact on FDI. Oil price had a significant positive impact on
Foreign Direct Investment in both countries. The conclusion to be drawn from this study is that there are different and similar factors affecting FDI inflow in
various countries. A similar factor may have a positive relationship with FDI in a country and yet have a negative relationship with FDI in another country.
The study recommends that the Central Bank of Nigeria should work towards reducing its inflation rate as this will help to attract FDI. Also, the government
of Morocco should provide a conducive environment for all businesses to grow. When local production increases, it helps to attract FDI into the
country.