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FOREIGN DIRECT INVESTMENT AND DEVELOPMENT OF SMALL AND MEDIUM SCALE ENTERPRISES IN NIGERIA

Kola Subair

Kwara State University, Nigeria

 

Olalekan Salihu

Kwara State University, Nigeria

 

ABSTRACT

Despite the significance attached to inflow of foreign direct investment (FDI) and the development of small and medium scale enterprises (SMEs) as essential driving forces for economic growth, the extent to which SMEs have developed in response to this inflow has remained an issue of concern given Nigeria’s poor economic predicament. Thus this paper investigates the extent to which FDI influences SME development in Nigeria. This paper extends beyond the existing literature given the cross-sectoral analysis of the Nigerian economy in addition to the analysis of FDI and SME development through the use of ordinary least square. Hence, compared to the level of generalization in the literature, result from this study is more precise while at the same time addresses small and medium scale businesses in different sectors of the Nigerian economy with respect to FDI.

Keywords: Foreign direct investment, small and medium scale enterprise, economic growth, Nigeria

JEL Classifications: F21, L26, O14, O17