COMPANY INCOME TAX, FOREIGN DIRECT INVESTMENT AND THE NIGERIA ECONOMY

ABSTRACT

The study empirically examined the relative contribution of FDI and company income tax on economic growth in Nigeria 1981 to 2019. The Augmented Dickey Fuller unit root test was employed to test for the order of integration of the series. It was found to be stationary at first differences. Then the Johansen Co-integration technique was employed to determine if there is long run relationship between the dependent and independent variables of the model. Furthermore, the Error Correction Mechanism technique (ECM) was used to estimate the regression coefficients and to correct for any disequilibrium between the short run and long run dynamics of the model. The short run and long run version of the model were specified. Results showed that, FDI was correctly signed and was statistically significant. The study therefore recommends, among others, that Authorities need to step up effort by relevant policies that could attract enormous inflow of FDI.