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Business Review

Abstract

This paper investigates the relationship between Foreign Direct Investment (FDI) and labour productivity. The paper is able to clarify whether employees of foreign firms record significantly higher productivity levels than their counterparts in domestic firms in Nigeria’s manufacturing sector. Using data from the World Bank Nigerian Manufacturing Survey 2001, employing an Ordinary Least Squares (OLS) regression model run on STATA, the paper finds that employees in foreign firms exhibit higher levels of productivity than their counterparts in domestic manufacturing firms. On the basis of this finding, the paper speculates on whether the differential is as a result of better training by foreign firms or due to greater capital intensity and better technology available to foreign firms. There is need for further research to substantiate these speculations. Result from this study did not reveal which of these factors is responsible for the difference in the labour productivity between domestic and foreign firms in Nigeria’s manufacturing factor. There is also no existing study to show that the difference in the productivity levels of foreign and domestic firms in Nigeria’s manufacturing sector is explained by the presence of more training, capital and technology in the former.

Keywords

Foreign Direct Investment (FDI), Labour productivity, Manufacturing sector

Creative Commons License

Creative Commons Attribution 4.0 International License
This work is licensed under a Creative Commons Attribution 4.0 International License.

Published Online

April 13, 2021

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Business Commons

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