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

1
Adelowokan Oluwaseyi A
Adelowokan Oluwaseyi A
2
Adelowokan Oluwaseyi A.
Adelowokan Oluwaseyi A.
3
Balogun Oluwakemi D.
Balogun Oluwakemi D.
4
Adesoye A.B.
Adesoye A.B.
1 Olabisi Onabanjo University, Nigeria

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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.

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No external funding was declared for this work.

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The authors declare no conflict of interest.

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No ethics committee approval was required for this article type.

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Adelowokan Oluwaseyi A. 2015. \u201cExchange Rate Volatility on Investment and Growth in Nigeria, An Empirical Analysis\u201d. Global Journal of Management and Business Research - B: Economic & Commerce GJMBR-B Volume 15 (GJMBR Volume 15 Issue B10): .

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GJMBR Volume 15 Issue B10
Pg. 21- 30
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Crossref Journal DOI 10.17406/GJMBR

Print ISSN 0975-5853

e-ISSN 2249-4588

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GJMBR-B Classification: JEL Code: P45
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November 30, 2015

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English

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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.

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

Adelowokan Oluwaseyi A.
Adelowokan Oluwaseyi A.
Balogun Oluwakemi D.
Balogun Oluwakemi D.
Adesoye A.B.
Adesoye A.B.

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