FDI and the Environment in Developing Economies: Evidence from Nigeria

The study conducts an investigation on the causal relationship among FDI, economic growth and environment using the Autoregressive Distributed Lag (ARDL) approach. Annual time series data is employed for the period spanning 1970-2006. The results which emanated from the findings depict that there was none existence of a long run relationship between FDI and growth on the one hand while there exists a long run causal link between CO2 per capita (a measure of environmental quality) and FDI inflows on the other hand. The policy lessons from these findings are that any policy that will aim at attracting foreign direct investment inflow should be one that will encourage and promote the adoption of cleaner production technologies.