THE IMPACT OF SOCIAL GLOBALIZATION ON FOREIGN DIRECT INVESTMENT

IN NIGERIA; A STUDY OF SELECTED ORGANIZATIONS IN LAGOS

BY

EKEAGU RITA UCHE

MATRIC NO: 199088034

A PROJECT SUBMITTEDTO THE DISTANCE LEARNING INSTITUTE,

UNIVERSITY OF LAGOS, IN PARTIAL FULFILMENT OF THE REQUIREMENTS
FOR THE AWARD OF THE DEGREE OF MASTER OF SCIENCE (M.Sc.) IN PUBLIC
AND INTERNATIONAL AFFAIRS

MARCH, 2023

CERTIFICATION

i
I, Ekeagu Rita Uche do hereby certify that the work embodied in this research work was carried

out by me and is original. It has not been submitted in part or in full to this institution or any

other institution for the award of a degree or diploma.

__________________________ __________
Dr. J. L. Omojolaibi Date

DEDICATION

ii
This work is dedicated to God Almighty, who saw me through and my parents for their moral

support and prayers.

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 ACKNOWLEDGEMENT

My immeasurable gratitude goes to the Almighty God, from whom every good thing comes. In
the same vein, my unflinching appreciation goes to my supervisor, Dr. J. A. Omojolaibi for
bringing his/her inestimable academic prowess to bear in the quality of this work. May God bless
him/her. I wish to equally register my indebtedness to the Head of Department of public and
international affairs, University of Lagos, and all the lecturers who taught me in my course work
and also rendered constructive criticisms of this written work: …………,………. as well as
…………... My heart-felt thanks also goes to the owners and Chief Executive Officers of the
businesses in Lagos State for their kindness and the rare cooperation I enjoyed from them during
my research mission to their establishments especially the those who even at the risk of incurring
the wrath of their employers accepted and completed my questionnaire. Similarly, I am deeply
indebted to my parents, Mr/Mrs Ekeagu for their prayers and moral support in pursuit of this
programme. In the same way, my appreciation goes to my siblings Ebere Ekeagu and Irene
Igboka as well as my friends and well-wishers.
God bless you all

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 ABSTRACT

The major concern of this research work is to examine the impact of social globalization on
foreign direct investment in Nigeria. The objective of this study was to examine the extent to
which trade liberalization, technological advancement and capital flow influence foreign direct
investment in Nigeria. A convenient sampling technique was used to draw a sample of one
hundred and eighty sic (186) respondents comprising of male and female from selected
organizations in Lagos state. Relevant data was obtained through the administration of
questionnaire and were analyzed using the Frequency Distribution Analytical Method while
Pearson product moment correlation method was used to test the hypotheses. The major findings
of this study showed that there is significant relationship between trade liberalization,
technological advancement and capital flow and foreign direct investment in Nigeria. In
addition, that there is positive and significant relationship between capital flow and
manufacturing productivity in the Nigerian business environment. Findings also revealed that
access to sufficient and adequate capital has been the basis for our improved productivity in
business organizations. The study concluded that the extent of Foreign Direct Investment and
trade openness showed that the Nigerian economy is gaining from globalization which is evident
in high GDP growth but the economy is yet to gain more by diversifying its exports hence,
recommended that efforts should be directed towards building and sustaining strong institutions
as well as providing necessary environment for boosting the potentials of optimizing the net
positive benefits of globalization in Nigeria.

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 TABLE OF CONTENTS

TITLE PAGE I

APPROVAL PAGE II

CERTIFICATION III

DEDICATION IV

ACKNOWLEDGEMENTS V

TABLE OF CONTENTS VI

ABSTRACT

CHAPTER ONE: INTRODUCTION

1.1 Background to the Study 1
1.2 Statement of the Problem 4
1.3 Purpose of the Study 6
1.4 Research Questions 6
1.5 Research Hypothesis 6
1.6 Significance of the Study 7
1.7 Scope of the Study 7
1.8 Operational Definition of terms 8
1.9 Plan of the Study 9

References 10

CHAPTER TWO: LITERATURE REVIEW

2.1 preamble 11
2.2 Conceptual Framework 11
2.3 Theoretical Framework 24

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2.4 Reviewed Related Literature 27
References 29

CHAPTER THREE: RESEARCH METHODOLOGY

3.1 Preamble 32

3.2 Research Design 32

3.3 Population of the Study 32

3.4 Sampling, Procedure and Sample Size 33

3.5 Data Collection Instrument and Validation 33

3.6 Method of Data Analysis 34

3.7 Limitations of the Methodology 34

References 36

CHAPTER FOUR: PRESENTATION OF RESULTS AND ANALYSIS OF DATA

4.1 Preamble 37
4.2 Analysis of Respondents According to Socio-Demographic Characteristics 38
4.3 Analysis of Questionnaire Items Related to the Variables of Study 41
4.4 Test of Hypotheses 47
4.5 Discussion of Findings 51
References 52

CHAPTER FIVE: DISCUSSION, RECOMMENDATIONS, AND CONCLUSION

5.1 Preamble 53
5.2 Summary 53
5.3 Conclusion 54
5.4 Recommendations 55
Bibliography 57
APPENDICES 61

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viii
 CHAPTER ONE

INTRODUCTION

1.1 Background to the Study

On the surface of the earth, no state or nation exists in isolation. In other words, no nation could

perhaps be in a state of freedom. It implies that no nation could have all resources (both natural

and human) at its disposal. Smith (1776), in his research, supported for interlinks (i.e.

globalisation or trade progression) of economies. Smith asserted that the main way economic

development and progress could without much of a stretch be kept up is for each country to

specialise on that product it has a favourable advantage in producing and import that product it

cannot produce efficiently. The evolution of the world from the beginning of the century and

millennium highlights the emphasis of the interdependent process between the key dimensions of

economic, political and diplomatic relationships, as well as the rapid and deep changes of large-

scale geo-economic and strategic areas - resulted in some sustained dynamics of trade,

investments, technological and informational flows, particularly through the increasing role of

foreign direct investment (FDI) in the modernization and streamlining of national economies in

the context of reform and privatization processes (Chirila-Donciu, 2013).

Globalisation refers the integration of individuals, firms, and governments globally. It entails to

greater interdependence and interconnectivity among countries. Globalisation consists of the

increased interaction of product and resources across nations via trade, immigration and foreign

investment through international flows of goods and services, people, investment in equipment,

factories, stocks and bonds. It could be political, technological and cultural, as well as economic

elements (Odebode & Aras, 2019). The International Monetary Fund (IMF) identified four main

aspects of globalisation to include trade and transactions; capital and investment movements;

1
migration and movement of people, and knowledge dissemination (IMF, 2008); while Verma &

Srivastava (2022) classified globalisation into financial, trade, cultural, interpersonal,

informational, and political dimensions.

For many developing countries, attracting foreign direct investment has been a key aspect of

their outward-oriented strategy, as investment is considered a crucial element for output growth

and employment generation. New trends have reinforced the importance of private investment.

As a result of the move towards neo-liberal policies, the state's role shifted from an active

ecomomic player with productive activities to a provider of an environment of doing business

and of social risk insurance (Ukpai, 2018). Social globalization refers to the sharing of ideas and

information between and through different countries. It pertains to human interaction with

cultural communities.

Private Investment both domestic and foreign, is viewed as the driving force of the economy.

Social globalization drives foreign direct investment (FDI), and foreign direct investment is seen

to complement scarce domestic financial resources. It is also expected to help modernize

production by transferring know-how and technology, while increasing domestic productivity

and competition and improving International competitiveness (Ben, 2018). Since the 1980s, the

world economy has become increasingly "connected" and "integrated". On the one hand, the

decreasing transportation costs and diffusion of information and communication technologies

have implied a fast downgrading of the concept of "distance", while on the other hand, gross

trade, Foreign Direct Investments (FDI), capital flows and technology transfers have risen

significantly in most countries.

The Global DHL Connectedness Index (GDCI) 2020 indicates that Nigeria ranks behind 10 other

African countries out of which Ghana, Cote d’Ivoire and Togo are from West Africa (Olaiya,

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2020). The report tracks the cross-border movement of trade, capital, information, and people in

169 countries which account for about 99% of the global GDP. The lead author of GCI Steven

Altman attributed the drop in Nigeria’s index position to restrictive policies such as the border

closure while noting that globalisation would fast-track post-covid recoveries among economies.

The author however assured a brighter future given that the country had embraced and ratified

the African Continental Free Trade Area (AfCFTA) the crux of which is trade liberalisation in

Africa. Because the free trade is strongly advocated as a means of accelerating economic growth

(Odebode & Aras, 2020).

The current wave of "globalization” has been accompanied by increasing concern about its

impact in terms of employment and income distribution. Whatever definitions and indicators are

chosen, the current debate is characterized by an acrimonious dispute between advocates and

critics of globalization (Ubah, 2018). While this is true even as regards the employment and

income distribution effects within the developed world, positions diverge, even when sharply

over the impact on Developing Countries (DCs). For instance, the optimists underline the link

between increasing trade and economic growth and then they conclude that trade is good for

growth and growth is good for the poor (both in terms of job creation and poverty alleviation). In

contrast, the pessimists show that globalization is quite uneven in its impacts and gives rise to

negative counter-effects on the previously protected sectors, the marginalization of entire

regions. of the world economy and possible increases in within-country Income inequality (WCI)

(Adigwe, 2017).

Another aspect of this Kind of diversity of opinions is the debate about poverty indicators;

supporters of globalization underline the fact that worldwide absolute poverty has decreased over

the last two decades, while critics of globalization show that this result is almost entirely due to

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statistical artifacts and to the fast growing of China, whereas absolute poverty has increased in

many DCs and relative poverty has increased in the majority of countries (Ben, 2018). The

concept of globalization refers to the increasing integration of national economies significantly,

impacting positively on the world economy more than its envisaged negative aspects (Obed,

2018). Among these positive aspects of globalization are most frequently mentioned factors of

globalization which include internationalization of production and services, international division

of labour, global world trade, transfer of know-how, but also intercontinental transport and

especially communication represented mainly by the latest infromation and communication

technologies.

1.2 Statement of the Problem

Globalization has become a concept that has assumed currency in recent time. Since the late

1980s, globalization has dominated the global sphere as a result of the rapid advancement of

technological innovations. Globalization is currently a popular and controversial issue, though

often remains a loose and poorly defined concept (UKpai, 2018). Sometimes too

comprehensively, the term is used to encompass increase in trade and liberalization policies as

well as reduction in transportation costs and technology transfer.

It is a known fact that Nigeria is an import-based nation. With the discovery of oil, this has

inflicted a resource curse on the economy. Nigeria‘s major export is crude oil. Before the

exploration of oil, the agricultural sector was the biggest/ largest sector (export) for Nigeria, be

that as it may, the oil boom which occurred in the 1970s made the agricultural sector in the

business sector whittle away. The interest of the government in the exploration and export of

4
crude oil has led to the in attention of the agricultural sector; hence, lessening the overall

efficiency of the economy. (Mark 2017).

Concerns and issues are often raised about the impact of social globalization on employment,

working conditions, income and social protection. Beyond the world of work, the social

dimension of globalization encompasses security, culture and identity, inclusion and exclusion

and the cohesiveness of families and communities. Social globalization brings new potentials for

development and wealth creation. But there are divergent views and perceptions among people

as concerns its ecomomic and social impact, and indeed widely varying impacts on the interests

and opportunities of different sectors and ecomomic and social actors. Some argue that the

present model of globalization has exacerbated problems of unemployment, inequality and

poverty; while others contend that globalization helps to reduce them.

Currently, social globalization is swiftly penetrating every aspect of human endeavour,

particularly in foreign direct investment. The effect of social globalization on foreign direct

investment has been such that is met with mixed reactions. While the advocates of social

globalization argue that social globalization accelerates the spread of technology and innovation,

brings about lower costs for production, enhances higher standard of living, promotes

collaboration and shared resources, etc, the critics of social globalisation. contend that social

globalization activates potential exploitation of developing countries, breeds cultural

homogenization, and possibility of adverse effects on local economies and the environment

(Adesanya, 2019).

It is against this backdrop, that this study sets to investigate the impact of social globalization on

foreign direct investment in Nigeria. It will examine among other things, the effect of social

globalization on local economy and environmental. It will also examine the effect of increasing

5
trade and FDI on domestic employment. It will also determine the relationship between social

globalization and economic growth in Nigeria.

1.3 Aims and Objectives of the Study

The central aim of this study is to examine the impact of social globalization on foreign direct

investment in Nigeria while the specific objectives are to:

i. Examine the extent to which trade liberalization influence foreign direct investment in

Nigeria

ii. Assess if technological advancement has significant impact on foreign direct investment

in Nigeria.

iii. Examine the extent to which capital flow influence foreign direct investment in Nigeria.

1.4 Relevant Research Questions

In line with the aims and objectives above, the study sets to answer the following questions;

i. To what extent does trade liberalization influence foreign direct investment in Nigeria?

ii. Does technological advancement have significant impact on foreign direct investment in

Nigeria?

iii. Does capital flow have significant effect on foreign direct investment in Nigeria?

1.5 Relevant Research Hypotheses

The following are the hypotheses developed in the course of this study.

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Hypothesis one

Ho: Trade liberalization does not have significant influence on foreign direct investment in

Nigeria

Hypothesis two

Ho: technological advancement does not have significant impact on foreign direct investment

in Nigeria

Hypothesis three

Ho: Capital flow does not have significant effect on foreign direct investment in Nigeria

1.6 Significance of the Study

This study will be useful to the federal government of Nigeria, National Economic Council, and

other requisite stakeholders, as it will enlighten them on the salient factors that can enhance

social globalization in order to attract more foreign investments. It will also be beneficial to

students, individuals and corperate bodies, as it will serve as a reference source when carrying

further research on this topic. It will equally be of immense importance to students of tertiary

institutions, particularly, students of Masters in Public and International Affairs (MPIA), of the

University of Lagos, who may be carrying out research on a similar topic.

1.7 Scope of the Study

This research study is limited to the assessment of the impact of social globalization on foreign

direct investment in Nigeria. It shall identify the factors that facilitate social globalisation in

7
Nigeria, as well as determine the relationship (if any) between social globalisation and Nigeria's

socio-political environment, among other things. This work is expected to be completed within

two months, all other things being equal.

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1.8 Operational Definitions of Terms

Cultural Globalisation; This is the movement of ideas attitudes, meanings, values and cultural

products across national border.

Deregulation; Removing restrictions on businesses, and reduction of government or state

control of the economy.

Foreign Direct Investment; This describes a category of international investment made by a

resident entity in one economy (direct investor) with the objective of establishing a

lasting interest in an enterprise resident in an economy other that of the investor.

Globalization; This is the increasing interconnectedness and interdependency of the world's

nations and their people into a single global, economic, and political system.

Homogenization; Things becoming increasingly the same, in global terms, the erosion of local

cultures and the emergency of one global mono-culture.

Imperialism; Where one dominant country takes over and controls another country or countries.

Privatization; The transfer of publicly (state) owned enterprise to private sector companies.

9
1.9 Plan of the Study

This research study is divided in to five chapters.

Chapter one contains the introductory aspects of the study.

Chapter two reviews literature and theoretical frame work of the study.

Chapter three reveals the research methodology.

Chapter four deals with data analysis and interpretation.

Lastly, the study is summed up with the summary, conclusion and recommendation tagged

chapter five.

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References

Adesanya, T. O. (2019). Social Globalization: Issues and Challenges in the 21st Century
Developing Nations. An International Journal of Economics and Politics. 5(2)34-56.
Adigwe, S.O. (2017). Alternative Strategies for Economic Development. New Macmillian and
OECD Development Centre.
Ben, W. T. (2018). Introduction to UNESCO Conference on Multiculturalism, Globalisation, and
Identity. Rio de Janeiro, April 10-12.
Chirila-Donciu, Elena (2013). Globalization and Foreign Direct Investments, CES Working
Papers, ISSN 2067-7693, Alexandru Ioan Cuza University of Iasi, Centre for European
Studies, Iasi, 5(2). 177-186
IMF. (2008). Globalization: A brief overview. Retrieved from International Monetary Fund:
https://www.imf.org/external/np/exr/ib/2008/053008.htm
Mark, E. (2017). Understanding the Dynamics of Social Globalisation in the 21st century. A
journal of International Trad. 4(3). 16-25.
Obed, B. (2018). Nation-states and the Multinational Corporation: A political Economy of
Foreign Direct Investment: Princeton University Press.
Odebode, A. & Aras, O. N. (2019). The impact of globalization on manufacturing output: The
case of Nigeria. Journal of Management, Economics, and Industrial Organization, 3(3).
60-77.
Odebode, A. & Aras, O. N. (2020). The effect of trade liberalization on exports, imports and
balance of payment: The case of Sub-Saharan Africa. Journal of Management,
Economcis,
Olaiya, T. T. (2020). Nigeria ranks behind 10 African countries in globalisation index. The
Guardian. Retrieved from https://guardian.ng/news/nigeria-ranks-behind-10-african-
countries-in-globalisation-index/
Ubah, T (2018). Globalisation and its Ripple Effect on Foreign Direct and Investment In Nigeria.
Enugu Esley Publishers.
Ukpai. U.A (2018). The Challenges of Globalization in the 21st Century Developing Countries.
An International Journal of Politics and Business. 5(11). 45-65.

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Verma, B. & Srivastava, A. (2022). Dimensions of globalisation and economic growth of India:
Exploring causal linkages. Internal Journal of Economic Policy in Emerging Economies,
15(2-4), 197-213

CHAPTER TWO

LITERATURE REVIEW

2.1 Preamble

In this chapter, perspective revelant literature and theoretical framework on the impact of social

globalization on foreign direct investment in Nigeria and how they relate to the study are

discussed. The researcher has made attempts to understand the theories that are paramount in

analyzing the impact of social globalisation on foreign direct investment in Nigeria. The

theorical framework that provides the basis for this study is fully explored to ensure that the

work is academically sound and grounded. The conceptual review is also well treated.

2.2 Conceptual Framework

2.2.1 Concept of Globalization

Globalization as a trend and phenomenon has evolved over the years and it has various meanings

to different people. It has influenced the way nations and businesses adapt to new trends of

integration of markets via technology. Globalization as a phenomenon has different meanings

and definitions as described by academics and scholars. Morrison (2011) defines globalization as

a combination of processes in which there is free and quick movement by people, goods, firms,

resources all over the world without the impediment of border restrictions. The International

Monetary Fund (2018) sees globalization as a historic process brought about by human creativity

as well as technological advancements which has in turn increased economic integration

worldwide especially through the movement of capital, goods and services across borders.

12
Globalization is a significant measure used to evaluate how well organizations have performed

compared with their counterparts in other states/countries. Various businesses' recent

achievements in terms of good productivity and profitability can be attributed to the advent of

globalization, all things being equal. According to Chibuzo, Onuoha and Nwede (2017), the

concept of globalization has no fixed meaning, since different literature has provided the phrase

a different viewpoint / definition. They state that the term globalization could be summarized as

an extensive set of processes that relates to multiple networks of political, economic, cultural

exchange driven by information technology.

According to Ebong, Udoh, and Obafemi (2014), the biggest issue facing most developing

countries in particular is if they should expose their economy to the processes of globalization or

take a conservative measures to avoid threats or conditions that may impede their state's social ,

economic or political climate. The notion of globalization is not strange in our macro-

environment, Aluko, Akinola, Sola and Hopkins (2004) (2009) acknowledged that its

backgrounds can be traced to the terrific trade movements across Asia around the 15th century

onwards. The economic model predicted that countries that adhere to a further honest position in

the direction of globalization benefit from higher expansion rates than closed-ended economies

to trade (Ojo and Ololade, 2013). Hence, globalization gives rise to a rise in financial and capital

inflow which gives way for improved and superior technology to local firms to be made

available. This presumes a better production capacity for local manufacturing industries and

increases their efficiency (Hill, 2014). According to Bayo (2002), globalization is a process that

impacts businesses, markets, and countries.

2.2.2 Globalization in Developed and Developing Economies

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Generally, developed nations are the key globalization actors since it is about the expansion of

markets for goods and services. The advancement of globalization has trapped up with almost all

the world's economies, which are confronted with the veracities of enhanced integration of global

trade enabled by the swift increase in information technology. The increased integration of

national economies with the rest of the world is gradually evolving into a lucid global economy

hinged on free factor movement. The globalization method has unlocked vast prospects for the

manipulation of economies of scale and scope, making for fast growth and bestowing

comparative advantage on those who have gained access to it (Adenikinju, 2006). Therefore,

scholars have argued that globalization offers both opportunities and challenges, in particular to

developing countries like Nigeria.

Nonetheless, there exists a variation in the experiences of developing countries. As countries

most especially the developing countries are rapidly opening up in recent years, the major issue

about globalization and its resulting effects on poverty, economic growth, inequality, cultural

dominance and environment are increased(Samimi and Jenatabadi, 2014). According to Agwu

and Ugwuanyi (2012), globalization gives developing nations like Nigeria the chance to generate

wealth by exporting, expansion in universal goods and services traded ,as well as an access to

new technological ideas and institutional projects They also suggest that competition among

companies to get a significant stake in the vast international market has led to; specialization and

proficiency, superior quality products at condensed prices; economies of scale in production;

technology and management improvements.

The tides of global capital to emerging economies have not helped in stirring the economic

development and growth process because such movements are primarily in the form of foreign

bank loans, export credits, certified development finance and bonds having short-term maturity

14
that helps in facilitating the import-dependent conduct of the developing economies instead of

quick a process of local production that could evolve into the industrial development process

(Chibuzo et al., 2017). According to Chibuzo et al (2017), Nigeria's economy, for instance, is

characterized by a lack of infrastructure and motivation to produce goods and services. This has

instituted into a severe setback to industrial production in the country and has manifested into

difficulties in meeting the domestic economy's basic needs for goods and services.

Due to the lack of industrial production, the Nigerian economy cannot earn the benefits of

learning-by-doing and other positive externalities such as knowledge spillovers, research,

development (R & D), and technological leapfrogging. Like Nigeria, the unutilized resources of

the developing economies find their ways to the developed economies for use as raw materials

for industrial production. This has resulted in the below-par performance of the nation's

manufacturing industries. This subsequently stimulates the need to analyze the impact of the

concept of globalization of the manufacturing firm's productivity in Nigeria.

2.2.3 Components of Globalization

2.2.3.1 Trade Liberalization

International trade as an outlet is especially pertinent for emerging economies where the

availability of technology minimal, resources are inadequate and companies are reliant on

imported inputs of high quality (Mitra, Sharma and Véganzonès-Varoudakis, 2014). They

suggest that imports are usually seen by local firms as a form of increased competition,

encouraging them to invest and increase productivity. In addition, importing capital and

intermediate goods are regarded as boosting productivity through technology transfer from

developed nations and providing improved input quality (Topalova and Khandelwal, 2011). As

for businesses who export, foreign competition also promotes creativity and investment in more

15
competitive technology. Another significant element that directly affects manufacturing

productivity is the physical structure that influences production and efficiency proceeds through

external economies of scale and complemented with other factors.

The liberalization of trade is one of the most contentious policies in International Finance and

Economics. There are loads of arguments where free trade and tariff cuts are suggested and that

barriers will or won't help the economy (Olaifa, Subair and Biala, 2013). According to Olaifa et

al, (2013) numerous theoretical and empirical studies have been done to find out the correlation

between open trade and growth (Chaudhry, Malik and Faridi, 2010); (Ersoy and Deniz, 2011)).

This is as a result of prices getting lowered in competitive environs, and goods are diversified

through which greater welfare emerges. Additional economic benefits are improvements from

specialization and efficiency are further benefits of economic openness too so It is rational for

nations generally to wish to open their economy. Those who are for the policy are of the opinion

that it can encourage African economic growth. Meanwhile others maintained that liberalization

of trade will not make way for positive impact of the growth of African economies in the long

run.

2.2.3.2 Technology

Through several viewpoints, previous scholars have deduced and described the word

'technology,' and this has affected the design and outcomes of research, transfer agreements, and

government policies in general (Abdul Wahab, 2012). Therefore, previous studies have given the

term technology different meanings. As suggested by the study of (Kumar and Mittal, 1999)

technology consists of two main components: (1) a physical component consisting of elements

such as products, devices, facilities, prototypes, techniques and processes; and (2) an information

element consisting of competence in management, manufacturing, marketing, skilled labor and

16
operational areas. Sahal's previous definition (1981) views technology as 'configuration,' stating

that the item transferred (the technology) is built on a group of procedures and products that are

subjectively described but unique.

Current technology transfer studies have explicitly linked technology with information, and the

research and development processes are more focused on (Abdul Wahab, 2012). There exist two

basic components that can be identified by examining the technology definition; first being

‘information or method’ and the second is 'doing things.' Technology is often related to

achieving certain outcomes, solving certain challenges, carrying out certain tasks using different

abilities, employing information and leveraging assets (Abdul Wahab, 2012). The concept of

technology refers not only to the technology that is the product, but as well as to the cognizance

or details of its use, execution and method in product creation (Abdul Wahab, 2012).

2.2.3.3 Global Competition

Perhaps one of the most critical implications of the cycle of globalization is the need for

"interdependence" (Şanli and Ateş, 2018). With market growth and the emergence of technology,

the state of innovation has showed the value of the competitive strength of the countries (Şanli

and Ateş, 2018). They suggest that the outward-closed economic structure is regarded as one of

the impediments to growth and competitiveness, so that the idea of competition, which in recent

years is the most common concept, has become more important. According to (sanli ates 2018)

Competitiveness describes the capacity of meeting total demand and requirements in countries of

open markets. When the world is seen as an economy as a whole, global competitiveness is the

ability to adapt quickly and customized to world demand. They argue that competition is a

relatively wide-ranging mechanism, ranging from personal competition to companies or from

states to international cooperation, leading to increased productivity and revenue.). The 21st

17
century's understanding of competitiveness includes concepts of innovation, technological

innovation and total factor productivity

2.2.3.4 Capital Flow

Capital flow is the major element of the movement towards economic integration or

globalization of the world economy. Foreign capital has been welcomed as a catalyst for

development to supplement domestic resources since it is regarded as the vital component of

economic growth (Nkoro and Furo, 2012). Capital flows have been examined in different ways

including their influence on development, related drivers, policy instruments to address their

negative effects, and the nature of capital flows (Koepke, 2015).On a more limited research field,

several articles make reference to the determinants and consequences of extreme episodes of

capital flows.

For example, research on "sudden stops" suggests that economies face difficult changes,

depreciation of the exchange rate, bankruptcies and economic constriction when global factors

worsen (Forbes, 2012). On the other end, literature on "surges" indicates that capital inflows are

linked to inflation of asset price, currency appreciation, boom in commodity price, and a higher

probability of "stops" particularly in developing states (Forbes, 2012).

2.2.4 Concept of Productivity

The productivity concept of manufacturing can be addressed in different ways, however the most

common factors found in the works are: partial productivity, total factor productivity, and labor

productivity (Islam and Shazali, 2011). Partial productivity refers to multiple inputs to net

outputs. Total factor productivity expresses the ratio of all generated outputs to all used

18
resources. Labor productivity is calculated by the ability of that individual to attain the greatest

level of his productivity possible (Abdul-Majid, Saal and Battisti, 2011).

According to Syverson (2011) in simple terms, productivity is total performance in productivity;

amount of output given an amount of inputs produces and as such is usually expressed as a ratio

of output – input. Single-factor productivity measurements represent output units generated per

unit of a given input (Syverson, 2011). He suggests that labor productivity is by far the best used

measure of this kind, while productivity measures for capital as well as materials are sometimes

used. In addition, single factor productivity rates are of course influenced by the utilization rate

of the left-out inputs. Two companies may have very different levels of labor productivity while

they have identical production technology, if one uses capital much more intensively, say

because they face different factor prices (Syverson, 2011). Of this reason, researchers also use a

definition of productivity that is invariant to the rate of use of measurable factor inputs. This

measure is called total productivity factor (TFP) (it's also often referred to as productivity

multifactor) (Syverson, 2011).

2.2.5 Foreign Direct Investment

A foreign direct investment (FDI) is an investment in the form of a business in one controlling

ownership in a business in one country by an entity based in another country (Anigwe, 2016).

Foreign direct investment involves the movement of money by building factors. In other words,

FDI refers to movement of capital which involves ownership and control. This means that

foreign investors' investment in a company is more than 10% of the stockholding. Also, it is

foreign direct investment when a foreign firm controls up to or more than 50% of the share

outstanding of an indigenous company. Another form of foreign direct investment is when a

foreign company with its headquarters based in that country sets up a company that is a branch

19
plant of that home company. Foreign direct investment includes "mergers and acquisitions,

building new facilities, reinvesting profits earned from overseas operations, and intra company

loans". In a narrow sense, foreign direct investment refers just to building new facility, and a

lasting management interest (10 percent or more of voting stock) in an enterprise operating in an

economy other than that of the investor (Whyte, 2015).

Foreign direct investment is the sum of equity capital, long-term capital, and short-term capital

as shown in the balance of payments. FDI usually involves participation in management, joint-

venture transfer of technology and expertise. Stock of FDI is the net (i.e outward FDI minus

inward FDI ) cumulative FDI for any given period. Direct investment excludes investment

through purchase of shares (if that purchase results in an investor controlling less than 10% of

the shares of the company (Dunning, 2018).

Foreign direct investment, is a subset of international factor movements, is characterised by

controlling ownership of a business enterprise in one country by an entity based in another

country. Foreign direct investment is distinguished from foreign portfolio investment, a passive

investment in the securities of another country such as public stocks and bonds, by the element1

of "control". According to the Financial Times,"standard definitions of control use the

internationally agreed 10 percent threshold of voting shares, but this is a grey area as often a

smaller block of shares will give control in widely held companies. Moreover, control of

technology, management, even crucial inputs can confer de facto control (Thompson, 2014)

2.2.6 Types of Foreign Direct Investment

i. Horizontal Foreign Direct Investment(FDI); This arises when a firm duplicates its

home country-based activities at the same value chain stage in a host country through

FDI.

20
 ii. Platform Foreign Direct Investment (FDI); This is the foreign direct investment from a

source country into a destination country for the purpose of exporting to a third country.

iii. Vertical Foreign Direct Investment (FDI); This takes place when a firm through FDI

moves upstream or downstream in different value chains, i.e, when firms perform value-

adding activities stage by stage in a vertical fashion in a host country.

Foreign Direct Investment flows are more likely to go to countries with democratic institutions.

A 2010 meta-analysis of the effects of foreign direct investment (FDI) on local firms in

developing and transition countries suggests that, foreign investment robustly increases local

productivity growth.

2.2.7 Impact of Social Globalization on Foreign Direct Investment in Nigeria

Whatever definitions and indicators are chosen, the current debate is characterised by an

acrimonious dispute between advocates and critics of social globalization. While this is true even

as regards the employment and income distribution effects within the developed world, positions

diverge even more sharply over the impact on Developing Countries (DCs). Based on the above,

it is imperative here, to examine the impact of the concept in question, in two different aspects -

the positive and the negative impact.

2.2.7.1 Positive impact of Globalization on Foreign Direct Investment (FDI) in Nigeria

The positive impact of social globalization on foreign direct investment on developing countries,

particularly Nigeria can not be over-emphasized. The positive impacts are as published below:

i. Globalization changes the nature of economic activity among nations, expansion of trade,

opening global supply chains and providing access to natural resources and labour

market.

21
 ii. It increases interaction, integration and interdependence among nations. The more

countries and regions of the world become intertwined politically, culturally and

economically, the more globalized the world becomes.

iii. Globalization enables businesses to access lower priced raw materials and parts, take

advantage of lower cost labour markets and access larger and growing markets around

the world in which to sell their goods and services.

iv. Globalization enables money, products, materials, information and people flow more

swiftly across national boundaries today than ever. Advances in technology have enabled

and accelerated this flow and the resulting international interactions and dependencies.

These technological advances have been especially pronounced in transportation and

telecommunications.

v. Globalization creates opportunities to expand. Increased trade promotes international

competition. This, in turn, spurs innovation and, in some cases, the exchange of ideas and

know-how. In addition, people coming from other nations to do business and work bring

with them their own cultures.

vi. Globalization enables countries to access less expensive natural resources and lower cost

labour. As a result, they can produce lower cost goods that can be sold globally.

2.2.7.2 Negative Impact of Globalization on Foreign Direct Investment in Nigeria

Many proponents view social globalization as a way to solve systemic economic and social

problems. But critics see it as increasing global inequality. Among the critiques of social

globalization are the following issues:

i. Destabilizes markets: Critics of social globalization blame the elimination of trade

barriers and the free movement of people for undermining national policies and local

22
 cultures. Labour markets in particular are affected when people move across borders in

search of higher paying jobs or companies outside work and jobs to lower cost labour

markets.

ii. Damages the Environment: The transport of goods and services and people among

nations generates greenhouse gas and all the negative effects it has on the environment.

Global travel and trade also can introduce, sometimes in advertently, invasive species to

foreign ecosystems. Industries such as fishing and logging tend to go where business is

most lucrative or regulations are less strict, which has resulted in over fishing and

deforestation in some parts of the world.

iii. Lowers Living Standard: When companies move operations overseas to minimize

costs, such moves can eliminate jobs and increase unemployment in sectors of the home

country.

iv. Facilitates Global Recessions: Tightly integrated global markets carry a greater risk of

global recessions. The 2007 - 2009 financial crisis and "Great Recession" is a good

example of how intertwined global markets are and how financial problems in one

country or region can quickly affect other parts of the world. Social globalization reduces

the ability of individual nations to effectively use monetary and fiscal policy to control

the national economy.

v. Damages Cultural Identities: Critics of social globalization decry the decimation of

unique cultural identities and languages that comes with the international movement of

businesses and people. At the same time, the internet and social media are driving this

trend even without the movement of people and commerce.

23
 vi. Increases the Likelihood of Pandemics: Increased travel, critics say, has the potential to

increase the risk of pandemics. The H1N1 (Swine flu) outbreak of 2009 and coronavirus

in 2020 and 2021 are two examples of serious diseases that spread to multiple nations

quickly, which directly and indirectly affect foreign direct investment.

The current shape and pace of globalization is driven by several factors. Broadly speaking,

ecomomic, financial, politiical, technological and social factors have paved the way to

globalization. Economic factors mainly include, lower trade and investment barriers. Expansion

of financial sector is also considered an important force of globalization. Integration and

unification of financial markets around the globe through financial liberalization and

deregulation has increased the mutual dependencies of the economies. According to Greenwalf

and Smith (2016), capital account liberalization is elimination of rigid rule and regulations in

developing countries that could advance the flow of money.

Political factors can be defined in terms of government policies that are designed to facilitate

trade and commerce in view of globalization. Moreover, these policies are instrumental in

channelizing the flow of finance and capital. The process of globalization is led by a number of

national and international institutes and countries in formulating policies. Earlier surge of

globalization seems to be highly concentrated among developed countries (Madison, 2018).

However, the contribution of emerging markets economies in International trade has been

increasing significantly in past few years.

Technology plays an important role in expediting the process of globalization. It is conceived as

a major facilitator and a driving force in the globalization process. Technological movement has

allowed companies to rapidly globalize their products via foreign direct investment (FDI).

Multinational food chains are able to reproduce and standardize their products across globe

24
through fine connectivity coordinated by technology. The development of containerized ships

and air freight is considered to be key technological advancement in trade and commerce.

Similarly, the introduction of universal bar codes has increased the movement and flow of goods

worldwide. The creation of personal computers and internet created electronic business (E-

businesses) and electronic commerce (E-Commerce), which are used as a jurisdiction of recent

techno-globalism.

Financial sector has also benefitted from technology through electronic banking. Electronic

transfer of funds is considered to be the operating form of global electronic financial system. The

modern era of globalization is now experiencing "internet economies" due to advancement in

technology. Internet growth is a key factor for developing interpersonal relationship across the

globe. It is one of the necessary components for social globalization, and without the invention

of internet, it would be incomplete.

Social factors bring cultural convergence, that is, increasing similarity throughout the world,

through significant reduction in transport and communication cost. Nowadays, the cost of

transmitting information is almost negligible, shrinking the world to one single market.

Individuals and societies are taking advantage of this enormous reduction in cost by using

standard brands and services worldwide. As a result, societies are moving towards convergence

of taste, which is increasing homogeneity across globe. The aforementioned factors have

contributed to shaping globalization. These factors are responsible for flattening the world. It is

essential to know the potential source of globalization because the contribution of these factors is

not uniform across globe. The extent and intensity of globalization is found to be different

among countries and regions. This indicates that the factors which drive the process of

globalization may affect differently across developed and developing economies owing to the

25
structural conditions of one's country. However, there is a lack of empirical evidence in this

regard. Hence, the current study has attempted to address this issue.

2.3 Theoretical Framework of the Study

In the theoretical framework of this study, the researcher briefly reviewed the key aspects of the

theoretical debates in respect of the expected relationship between social globalization and its

impact on foreign direct investment (FDI) in Nigeria. To this end, the following theories have

been advanced:

26
2.3.1 Absolute Trade Theory of 1776

In Adam Smiths’ renowned book wealth of nations, he (Smith, 2010) talked about the

significance of trade as an outlet for excess production which widens the market and improves

the productivity level and labor division. Thus, a summarization of the absolute advantage trade

theory of Adam Smith is that countries should focus on exporting goods that they have complete

and absolute advantage and importing goods that they don’t have complete advantage and the

trading partner has no complete power over.

Each country should export those commodities it produces more efficiently because the free

labor required per unit is less than that of the prospective trading partners (Appleyard and Field,

1992). The Smithian trade theory generated a lot of arguments giving rise to subsequent trade

theories.

2.3.2 Comparative trade theory (1772-1823)

David Ricardo developed the comparative advantage theory in which he made known his

taxation and political economy principles that focuses on the assumption of total resource

employment, perfect competition, nations by focusing on the manufacturing of goods that have

the most minimal opportunity cost can reap welfare gains over local demand(Ruffin, 2002).

Consequently, this is in the case where foreign exchange rate amongst commodities lie between

the local ratios of opportunity cost. These are mostly fixed improvements that come from the

redistribution of resources from one sector to another and a rise in specialization, due to

comparative advantage, occurs. The fixed benefits gotten due to the fact that nations have

various endowments and as a result, goods produced varies in different countries (Ruffin, 2002).

The comparative advantage theory says nations who focus on producing goods in which they

have low opportunity cost in exchange for the products that have higher opportunity

27
costs(Ruffin, 2002). In contrast, the Heckscher-Ohlin theory(2003) describes international trade

as a determined relative factor of production prevailing in countries. This theory assumes that

businesses come from differences in relative costs, that consequently results from inter-country

changes in relative factor endowments. This means that states should make use of resources that

are abundant locally to produce export goods and import goods that are locally scarce. By

implication, the emphasis of this theory is that countries should rely on factor endowment. This

links international trade to the global movement of labor and capital with the for-going

assumptions:

i. No trade restrictions or transport costs exists.

ii. The factor and commodity market has perfect competition.

iii. Production functions are of the same in the first degree.

iv. The production functions are similar in the two nations but differ between commodities.

Some economists(Jhingan, 1994) believe that an upgrade of the Ricardian comparative

advantage theory is the Heckscher-Ohlin model.

2.3.3 Hyperglobalist Theory

The hyperglobalist theory states that globalization is happening and that local cultures are being

eroded primarily because of the expansion of international capitalism and the emergence of a

homogeneous global culture. The hyperglobalists believe that globalization is a positive process

characterized by economic growth, increasing prosperity and the spread of democracy.

According to Thomas Friedman (2000), globalization has occured because of the global adoption

of neoliberal economic policies. Neoliberals insist that governments in developing countries need

to remove obstacles to free trade and free market capitalism in order to generate development.

28
Governments should limit their role to providing a business-friendly environment that enables

business. (both inside and outside the country) to make a profit.

The hyperglobalist theory emphasizes that if governments allow businesses the freedom to "do

business”, wealth will be generated which will trickle down to everyone. Friedman identifies a

neoliberal economic set of principles that he calls the "golden straight jacket” that countries need

to fit into if they are to achieve success in the global economy: deregulation, fewer protections

for workers and the environment , privatization and cutting taxes. Friedman argues that the

golden straight jacket is "a pretty much one size fits all... it is not always pretty or gentle or

comfortable. But it is here and it is the only model on the rack this historical season”. Friedman

attributes economic globalization to the fact that most developing countries have adopted

neoliberal policies since the 1980s. Neoliberalism has effectively restricted the power of nation

states, marking trade between nations easier. It has resulted in the free movement of goods,

resources and enterprises, and ultimately more Jobs, cheaper products and increasing economic

growth, prosperity and wealth for the majority of people on the planet. The hyperglobalist theory

is relevant to this study because, it tries to explain how globalization eliminates or decline the

trade restrictions, give a boost to technology transfer, and enhance the capital inflows by

increasing foreign direct investment.

2.4 Empirical Review of related Literature

In the literature, foreign direct investment is regarded as the primary channel through which

technology is transferred to many developing economies from their developed counterparts. And

this trend is facilitated by globalization. From studies, FDI has the tendency to increase growth

29
of a host economy by generating technological diffusion from the already developed Western

World (Borensztein, De Gregorio & Lee (2016).

According to Dunning (2018), there are five main avenues through which globalization can be

linked to FDI flows. These avenues are as follows: competition, exportation, demonstration,

mobility of labour and backward and forward linkages with domestic firms. Therefore, social

globalization does not only raise the skill level of the host country, but also helps to introduce

modern technologies and reduce prices of goods.

According to Adams (2020), Moore (2010), and Ben (2017), globalization has positive effects on

growth. However, other scholars such as Ang (2009), Aitken and Harrison (2019) and Haddad

(2018) find that globalization could have negative effect on productivity and economic growth of

the local firms.

Studies carried out by Adediran (2019), and Nathan (2015) suggest that foreign firms through

FDI do transfer technologies to their affiliates. This process which can equally allow positive

externalities to unaffiliated firms in Nigeria and can, in turn, increase growth through

productivity and efficiency gains by local firms.

According to Akin and Aremo (2013), FDI, which results from globalization contributes to

economic growth through technology transfer. Transnational companies (TNCs) can transfer

technology either directly (internally) to their foreign owned enterprises (FOEs) or indirectly

(externally) to domestically owned and controlled firms in the host country. Spillovers of

advanced technology from foreign owned enterprises to domestically owned enterprises can take

any of four ways: vertical linkage between affiliates and domestic suppliers and consumers;

horizontal linkage between the affiliates and firms in the same industry in the host country;

30
labour turnover from affiliates to domestic firms; and internationalization of Research and

Development.

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Adams, W.E. (2020). Foreign Direct Investment and Technology Spillover: A Cross Industry
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Adediran, O (2019). Is there any relationship between monetary policy tools and external credit-
growth nexus in Nigeria? Cogent Economic & Finance. 7(4)11-18.
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Adewale, T. (2016). The Distribution of Wealth: Measurement and Models. Journal of
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Akinlo, A.E., & Aremo, G.A. (2013). The Effect of Trade Liberalization On Some Selected,
Poverty Indicators in Nigeria (1980-2009): Generalized Method of Moments (Gmm)
Approach. American. Journal of Economics, 3(5), 199-209.
Aluko, M., Akinola, G. & Sola, F. (2004) 'Globalization and the manufacturing sector: A study
of selected textile firms in Nigeria', Journal of Social sciences, 9(2). 119-130.
Ang, J. B. (2009). Financial Development and the FDI Growth Nexus: The Malaysian
experience. Applied Economics, 41 (13). 1595-1601.
Appleyard, D. & Field, A. (1992) 'JR. 1998', International Economics.
Atken, B. & Harrison, A. (2019). Do Domestic Firms Benefit From Direct Foreign Investment?
Evidence from Venezuela. The American Economic Review, 89 (3) 605-618.
Bayo, A. (2002) 'Globalization and Nigeria Economy', The Economist, 4; 36-37.

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Ben, J. (2017). Foreign Direct Investment, Competition and Industry Performance. World
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Borensztein, E., De Gregorio, J. & Lee, J. (2016). How Does Foreign Direct Investment Affect
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Chaudhry, I. S., Malik, A. & Faridi, M. Z. (2010) 'Exploring the causality relationship between
trade liberalization, human capital and economic growth: Empirical evidence from
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Chibuzo, E. V., Onuoha, B. C. & Nwede, I. (2017) 'Globalization and performance of
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Dunning, M. (2013). The Global Age: State and Society Beyond Modernity, Stanford. Stanford
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Ebong, F., Udoh, E. & Obafemi, F. (2014) 'Globalization and the industrial development of
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33
34
 CHAPTER THREE

RESEARCH METHODOLOGY

3.1 Preamble

The focus of this chapter was on the methods through which data were collected and analyzed in

the course of the study. Thus, the outline of this chapter includes: the research design,

characteristics of the population of the study, sampling, procedure and sample size, data

collection instrument and validation, method of data analysis, and the limitations to the chosen

methodology of study.

3.2 Research Design

The study adopted both descriptive survey and inferential statistics research design. The purpose

of inferential statistics will be to reduce bias and increase reliability; it also permits drawing

inferences about causality (Kothari 2009). The purpose of this descriptive survey research design

will be to obtain pertinent and precise information concerning the current status of phenomenon

and whenever possible to draw valid general conclusions from facts discovered. Descriptive

survey is the means through which opinion, attitude and suggestions for improvement of

educational practices and instructions and other data can be obtained (Gall, Gall & Borg 2007).

3.3 Population of the Study

According to Saunders et al. (2003) population is the full set of cases from which a sample is

taken. Population can therefore be defined as the total collection of elements about which a

researcher wishes to make some references. The target population of this study consists of both

managers and staff of selected government and multinational institutions in Lagos states which

35
includes chambers of commerce and industries, antinational bureau of statistics and MTN

Nigeria Plc. For the purposes of this study, the sampling frame consists of respondents from the

selected organizations.

3.4 Sampling, Procedure and Sample Size

Sampling is the process of drawing samples from the universe. There are types of sampling

procedures or methods. These are probability and non-probability. To study the entire population

is not always feasible due to constraints such as time, cost and other logistics constraints. Hence,

this research was restricted to managers and staff of selected government and multinational

institutions in Lagos state and a convenience sampling technique was applied to select two

hundred (200) respondents comprising of both top middle and lower level staff of the selected

organizations.

3.5 Data Collection Instrument and Validation

Questionnaire was adopted as the data collection instrument for the collection of primary data for

the study on the adoption of impact of effective communication as a management tool for

enhancing organizational performance. The questionnaire was designed in three separate

sections: A and B.

The questions in section A were meant to collect relevant information about the background of

the target respondents (their Bio-data).

The section B contains relevant questions meant to solicit the desired response on various

aspects as follow: To examine the relationship between effective communication and

organizational performance of the selected organization, using a five-point response likert scale

36
ranging from strongly agree to strongly disagree. To test for validity of the research instrument,

first, a drafted copy was presented to the Project Supervisor in order to enhance its face and

content validity. The questions were neither so few nor so many, vague, which personalised and

ambiguous words were avoided.

To ensure instrument reliability and scale validity, the items selected for the survey was taken

from previous empirical work with readily established validity and reliability. Secondly, the

questionnaire items and its scale were checked and moderated by the project supervisor. On the

whole, questionnaire items were clearly understood by the respondents.

3.6 Method of Data Analysis

Tables, frequency and percentage were the descriptive statistical tools for primary data

presentation. All data were meticulously analyzed using percentage. This allows inference to be

drawn from data on effective communication and organizational performance. The Pearson

Product Moment Correlation was employed in testing the hypotheses in order to examine the

relationship between dependent (globalization) variable and independent (Foreign direct

investment) variable. All data collected was processed and analyzed through the use of statistical

package for social science (SPSS) version 26.0

3.7 Limitations to the Methodology

The limitations of the adopted methodology include the infinite nature of the population of study

as the exact number of professionally qualified and practising in the State is indeterminate and

could not be obtained from any of the available sources. Also, among the observed limitations

include the fact that descriptive research designs data collection tools like questionnaire lack

37
control and responses from it are often marred with bias in spite of its usefulness in obtaining

raw but current data on the area of the study, according to Asika (1991).

38
Reference
Asika, N. (1991) Research Methodology in the Behavioral Sciences, Longman Publisher Ibadan,
Nigeria. 39-40.
Kothari, C. R. (2004). Research Methodology, Methods and Techniques: New Age International
Publishers, New Delhi, India.
Saunders, M., Lewis, P. & hornhill, A. T. (2003). Research method for business students (3rd
ed.). New York: Prentice Hall.

39
 CHAPTER FOUR

DATA PRESENTATION AND ANALYSIS

4.1 Preamble

This chapter is concerned with the analysis of data generated by the research study and

presenting the result. For this purpose, the chapter is divided into three parts. The first part is

the analysis of respondent’s demographic data. The second section presents the results taken

from statistical analysis of primary research questions, while the final part is the test of

hypotheses and discussion of findings. In order to ensure that the exact sample size is

selected, two hundred (200) copies of the questionnaire were administered to participants of

the study and one hundred and eighty-three (183) copies were properly filled and returned

on schedule giving a 91.5% response rate. Data analysis is therefore based on the number of

returned copies of questionnaire. Data are presented in tabular form with brief description

underneath.

40
4.2 Analysis of Respondents According to Socio-Demographic Characteristics

Table 4.1 Socio-Demographic Characteristics of Respondents

s/n Variables Items Frequency Percent

1 Male 108 59.0

Respondent’s Gender Female 75 41.0

Total 183 100.0

2 Below 30 years 32 17.5

30-39 years 50 27.3

Respondent’s Age 40 - 49 years 54 29.5

50 years and above 47 25.7

Total 183 100.0

3 Single 50 27.3
Married 84 45.9
Divorced 26 14.2
Marital Status Widowed 23 12.6
Total 183 100.0
WAEC /SSCE 31 16.9

4 Education Qualification OND /NCE 38 20.8

HND/B.SC/B.A 65 35.5
MSC/MBA 31 16.9
Professional 18 9.8
Total 183 100.0
5 Chambers of comm. 69 37.7
& Industries
Organization
NBS 56 30.6
MTN Nig Plc 27 14.8
Unilever Nig Plc 31 16.9

41
 Total 183 100.0
6 1 – 5 Years 37 20.2
6 – 10 Years 49 26.8
Length of experience
11 -15 Years 68 37.2
16 Years & Above 29 15.8
Total 183 100.0
Source: field survey, 2023

Table 4.1 shows the socio-demographic characteristics of sampled respondents in the sampled

organization. Focusing on the gender distribution of the respondents, 108 (59.0%) of the

respondents are male, while 75 (41.0%) of the respondents are female. This implies that majority

of the respondents that participated in the survey are male. According to respondents’ age

distribution, the result shows that 32 (17.5%) of the respondents are below the age of 21, 50

(27.3%) were within 21 - 29 years of age, also 54 (29.5%) of the respondents were within 30 - 39

years while 47 (25.7%) of the respondents were 40 years and above.

Results according to the respondents’ marital status show that 50 (27.3%) of the respondents are

single, 84 (45.9%) were married, 26 (14.2%) are divorced while 23 (12.6%) are widowed. This

indicates that majority of the respondents are married. Also, the distribution of the respondents

according to their Educational qualification shows that 31 (16.9%) of the respondents are

WAEC/SSCE holders, 38 (20.8%) has OND/NCE, 65 (35.5%) of the respondents has

HND/B.SC/BA, 31 (16.9%) has MSC/MBA while 18 (9.8%) has other professional certificates.

This simply means that majority of the respondents in this study are HND/B.SC holders. The

result is a further indication that majority of respondents were graduates of higher institutions

and that the company is staffed by educated workforce hence understands the importance of the

study.

42
Results according to the respondents’ religion, majority of the respondents standing at 69

(37.7%) sampled were Christians 56 (30.6%) are Muslims, 27 (12.8%) are traditionalists while

31 (16.9%) are atheists.

Finally, results according to the respondents’ field of specialisation shows that majority of the

respondents standing at 41 (22.4%) are businessmen and women, 49 (26.8%) are civil servants,

62 (33.9% were craftsmen and women while 31 (16.9%) are into various means of livelihood.

This shows that most respondents in this study has sufficient knowledge of the subject matter.

Thus, would be able to contribute meaningfully to answering the questions posed by the research

instrument. From the foregoing, it can be concluded that all the respondents understood the issue

being investigated and were in good positions to express their unbiased opinions on the subject.

43
4.3 Analysis of Questionnaire Items Related to the Variables of Study
Table 4.3.1: To what extent has self-esteem influenced political responsibility among the

people living in Ajegunle, Lagos?

S/ Questionnaire Items Method of SA A U D SD Total

N Analysis
Trade liberalization Frequency 34 60 47 28 14 183
1 Percentage 32.8 25.7 15.3 7.7 100.0
encourages trade between my (%)

company and its foreign 18.5

partners.

2 Trade liberalization enhances Frequency 39 66 37 33 8 183

Percentage 36.1 20.2 18.0 4.4
the optimal performance of (%) 100.0
21.3
my organization.

3 There have been no barriers Frequency 34 80 35 24 10 183

to trade internationally in
manufacturing sector. Percentage 18.6 43.7 19.1 13.1 5.5
(%)
100.0

4 Free exchange of goods and Frequency 33 59 47 30 14 183

Percentage 18.0 32.2 25.7 16.4 7.7 100.0
services enabled by (%)

globalization has helped my

organization immensely

5 Absence of excessive control Frequency 47 52 44 29 11 183

Percentage 25.7 28.4 24.0 15.8 6.0 100.0
of business by Nigerian (%)

governments has enabled my

organization to record

milestones.

Source: Field survey, 2023.

44
Table 4.2 above shows the distribution of sample respondents according to the research which

focuses on the extent self-esteem influenced political responsibility among the people living in

Ajegunle, Lagos, shows that 113(61.7%) and 58(31.7%) cumulatively agreed that sense of moral

identity in reaction to the strong waves with corruption in the electoral system has scared some

away from politics, 9(4.9%) are undecided while 3(1.6%) disagreed. Item 2 shows that

70(38.3%) strongly believe they have the right to choose who represent them in government.

101(55.2%) agree, and 12(6.6%) were undecided. Since 171 respondents representing 93.5% of

the respondents agreed, therefore this shows that the people has the right to choose whom to

represent them in government. Item 3 also indicates Fear of intimidation has scared many people

away from participating in politics as 62 (33.9%) and 66 (36.1%) of the respondents

cumulatively agree, while 55 (30.1%) are undecided. The results on item 4 shows that Politics in

Nigeria is meant for the rich against competency and character as 78(42.6%) of the respondents

strongly agree, 46(25.1%) agree, 56(30.6%) were undecided and 3(1.6%) disagree to the

statement. Since 124 representing 67.8% of the respondents strongly agree to the statement, it is

considered to be true.

Finally, item 5 indicates that information that Lack of acceptance by the people has scared

competent individuals away from participating in politics in Nigeria as 57(31.1%) of the

respondents strongly agree, 117(63.9%) agree, and 9(4.9%) undecided.

45
Table 4.3.2: RQ2: Does religious affiliation have significant impact on political

responsibility among the people living in Ajegunle, Lagos?

S/ Questionnaire Items Method of SA A U D SD Total

N Analysis
Advanced technology Frequency 40 64 40 29 10 183
6 enhances work processes and Percentage 35.0 21.9 15.8 5.5 100.0
procedures in my (%) 21.9
organization
7 Technology leads to good Frequency 47 60 22 35 19 183

product innovation and Percentage 32.8 12.0 19.1 10.4 100.0

(%)
25.7
creativity in my organization

8 Technology development Frequency 44 73 33 24 9 183

enhances good product Percentage 39.9 18.0 13.1 4.9 100.0
packaging and increases (%) 24.0
product values in my
organization
9 There has been rapid Frequency 41 77 36 23 6 183
Percentage 22.4 42.1 19.7 12.6 3.3 100.0
dispersion of means and (%)

methods of producing goods

and services in my

organization

10 The development of transport Frequency 43 63 22 39 16 183

Percentage 23.5 34.4 12.0 21.3 8.7 100.0
and telecommunication (%)

technology, as well as the

internet has helped effective

interactions and

communication in my

organization

Source: field survey, 2023

46
Table 4.3 above shows the distribution of sample respondents according to the research which

focuses if religious affiliation have significant impact on political responsibility, it shows that

80(43.7%) of the respondents strongly agree that The citizens who thought themselves to be

righteous tend to distance themselves from political engagement, 55(30.1%) agree, while

21(11.5%) undecided and 27(14.8%) disagreed to the statement. Item 7 also shows results of

respondents on the view People feel more comfortable voting for contestants from same religion

with them as against a more competent candidate from another religion as 66(36.1%) and

108(59.0%) cumulatively agree, while 6(3.3%) undecided and 3(1.6%) disagree. Since 174

representing 95.0% agreed, this shows that indeed, People feel more comfortable voting for

contestants from same religion with them as against a more competent candidate from another

religion. Item 8 shows that 7(3.8%) of the respondents strongly agree on the view that Most

Christians feel that participating in politics would jeopardize their heavenly race, 108(59.0%)

agree, 40(21.9%) undecided, while 9(4.9%) and 19(10.4%) cumulatively disagree. Item 9

indicates that Religious affiliation has led so many voters to voting in the wrong representatives

as 46(25.1%) and 134(73.2%) cumulatively agree and 3(1.6%) undecided. The results show that

majority of the respondents agree to the statement with 134(73.2%).

Finally on item 10 shows that 27(14.8%) of the respondents strongly agree that Most religious

people stay away from politics in other not to be perceived as worldly. 139(76.0%) agree, and

17(9.3%) are undecided.

47
 Table 4.3.4: RQ3: To what extent has self-esteem and religious affiliation impacts
on political responsibility among the people living in Ajegunle, Lagos?
S/ Questionnaire Items Method of SA A U D SD Total
N Analysis
There has been capital inflow Frequency 47 62 41 26 7 183
11 Percentage 33.9 22.4 14.2 3.8 100.0
into my organization from (%)

abroad as one of the benefit 25.7

of globalization.

12 Globalization has
enabled Frequency 53 56 28 32 14 183
Percentage 30.6 15.3 17.5 7.7 100.0
free movement of human and (%)

financial resources into my

29.0
organization for effective

operation

13 There is greater access to Frequency 44 63 40 28 8 183

financial resources both
Percentage 34.4 21.9 15.3 4.4 100.0
locally and internationally as
(%) 24.0
a result of globalization in my
organization
14 Capital flow has enhanced Frequency 47 60 34 28 14 183
Percentage 25.7 32.8 18.6 15.3 7.7 100.0
economic growth, which has
(%)
enhanced the fortunes of my

organization

15 Access to sufficient and Frequency 38 67 39 28 11 183

adequate capital has been the Percentage 20.8 36.6 21.3 15.3 6.0 100.0
(%)
basis for our improved

productivity in this

organization

Source: Field survey, 2023

48
Table 4.4 above shows the distribution of sample respondents according to the research which

focuses on impact of self-esteem and religious affiliation on political responsibility, it shows that

24(13.1%) and 155(84.7%) of the respondents cumulatively agree that Religion and ethnicity is a

source of mobilization for political actors while 4(2.2%) undecided. The result shows that

majority of the respondents agree to the statement with 179 representing 97.9% of the

respondents. Item 12 indicates that 40(21.9%) of the respondents strongly agree on the view that

they can’t participate in politics considering their personal values and standards. 107(58.5%)

agree, while 33(18.0%) undecided and 3(1.6%) disagree. Since majority of the respondents

agreed, it shows that they can’t participate in politics considering their personal values and

standards. Item 13 shows that management committee of the organization is competent to handle

the operations of the organization as 147(80.3%) and 33(18.0%) of the respondents cumulatively

agree and 3(1.6%) undecided. The results show that majority of the respondents strongly agree to

the statement. Furthermore, Item 14 also shows that low self-esteem and pessimism is the major

reason many people avoid participating in politics as 76(41.5%) and 103(56.3%) cumulatively

agree, and 4(2.2%) undecided. Since majority of the respondents agreed, it shows that it is true

that low self-esteem and pessimism is the major reason many people avoid participating in

politics.

Finally on item 15, it shows that 44(24.0%) of the respondents strongly agree on that the

involvement of military into politics which has destroyed democratic cultures and institutions has

robbed the people of having knowledge of what the ideal, proper and civil political processes

should be 112(61.2%) agree, 10(5.5%) undecided, and 17(9.3%) disagree to the statement.

49
4.4 Test of Hypotheses

In testing hypothesis using Pearson correlation, items relating to impact of self-esteem and

religious affiliation (independent Variable) on political responsibility (dependent variable) were

gathered and processed through the SPSS version 26. The hypotheses are tested using Pearson

Product Moment Correlation analysis and results are summarized in the Tables below.

Hypothesis One

Ho: Trade liberalization does not have significant influence on foreign direct investment in

Nigeria

Pearson’s Product Moment Correlation Matrix showing the correlation on the impact of self-
esteem on Foreign Direct Investment In Nigeria
Foreign Direct Investment

Trade liberalization In Nigeria

Trade Pearson
1 .460**
liberalization Correlation

Sig. (2-tailed) .000

N 183 183

Foreign Direct Pearson

.460** 1
Investment In Correlation

Nigeria Sig. (2-tailed) .000

N 183 183

**. Correlation is significant at the 0.01 level (2-tailed).

50
Interpretation

Pearson correlation is an inferential statistic that describes the magnitude and direction of

relationship between two or more variables. Pearson correlation coefficient (r) ranges between -1

to+1 and the closer the r value to +1, the stronger the relationship between the variables of study.

As evident on the above Table, Trade liberalization correlated strongly and significantly with

Foreign Direct Investment In Nigeria at a correlation coefficient of r = 0.460 at a probability (p)

< 0.01.

Given the above result, there is a significant association between the dependent and independent

variable in this study. Hence, the null hypothesis is rejected while the alternative hypothesis is

accepted with the conclusion that Trade liberalization does has significant influence on foreign

direct investment in Nigeria.

51
Hypothesis two

Ho: Technological advancement does not have significant impact on foreign direct investment

in Nigeria

Pearson’s Product Moment Correlation Matrix showing the impact of Technological

advancement on Foreign Direct Investment In Nigeria

Technological Foreign Direct Investment

advancement in Nigeria

Pearson 1 .561**

Technological Correlation

advancement Sig. (2-tailed) .000

N 183 183

Pearson .561** 1

Foreign Direct Correlation

Investment in Nigeria Sig. (2-tailed) .000

N 183 183

**. Correlation is significant at the 0.01 level (2-tailed).

Interpretation
As evident on the above Table, Technological advancement indicates significant impact on

Foreign Direct Investment in Nigeria, at a correlation coefficient of r = 0.561 at a probability (p)

< 0.01.

Given the above result, there is a significant association between the dependent and independent

variable in this study. Hence, the null hypothesis is rejected while the alternative hypothesis is

accepted with the conclusion that technological advancement has significant impact on foreign

direct investment in Nigeria.

52
Hypothesis three

Ho: Capital flow does not have significant effect on foreign direct investment in Nigeria

Pearson’s Product Moment Correlation Matrix showing the impact of Capital flow on Foreign

Direct Investment in Nigeria

Capital flow Foreign Direct Investment in

Nigeria

Pearson 1 .580**

Correlation
Capital flow
Sig. (2-tailed) .000

N 183 183

Pearson .820** 1

Foreign Direct Correlation

Investment in Nigeria Sig. (2-tailed) .000

N 183 183

**. Correlation is significant at the 0.01 level (2-tailed).

Interpretation
As evident on the above Table, Capital flow has significant impact on Foreign Direct Investment

In Nigeria with at a correlation coefficient of r = 0.580 at a probability (p) < 0.01.

Given the above result, there is a significant association between the dependent and independent

variable in this study. Hence, the null hypothesis is rejected while the alternative hypothesis is

accepted with the conclusion that Capital flow has significant effect on foreign direct investment

in Nigeria.

53
4.5 Discussion of findings

The study examined the impact of social globalization on foreign direct investment in Nigeria

and based on the results of the hypotheses; the first hypothesis stated that Trade liberalization

does has significant influence on foreign direct investment in Nigeria. International trade as an

outlet is especially pertinent for emerging economies where the availability of technology

minimal, resources are inadequate and companies are reliant on imported inputs of high quality

(Mitra, Sharma and Véganzonès-Varoudakis, 2014). The above statement gave credence to the

results of the first hypothesis

The second hypothesis stated that technological advancement has significant impact on foreign

direct investment in Nigeria. This result is in line with the study conducted by Studies carried out

by Adediran (2019), and Nathan (2015) which suggested that foreign firms through FDI do

transfer technologies to their affiliates. This process which can equally allow positive

externalities to unaffiliated firms in Nigeria and can, in turn, increase growth through

productivity and efficiency gains by local firms.

Finally, in hypotheses three, it stated that Capital flow has significant effect on foreign direct

investment in Nigeria. Dunning (2018) in his study gave a foundation to the result of the second

hypothesis in his findings that there are five main avenues through which globalization can be

linked to FDI flows. These avenues are as follows: competition, exportation, demonstration,

mobility of labour and backward and forward linkages with domestic firms. Therefore, social

globalization does not only raise the skill level of the host country, but also helps to introduce

modern technologies and reduce prices of goods.

54
References
Adediran, O (2019). Is there any relationship between monetary policy tools and external credit-
growth nexus in Nigeria? Cogent Economic & Finance. 7(4)11-18.
Dunning, M. (2013). The Global Age: State and Society Beyond Modernity, Stanford. Stanford
University Press.
Nathan, E-J. (2015). Globalization: Social Theory and Global Culture. Newbury Park. CA:
Sage.

55
 CHAPTER FIVE

SUMMARY, CONCLUSION AND RECOMMENDATIONS

5.1 Preamble

This study was carried out to examined the impact of social globalization on foreign direct

investment in Nigeria. For the purpose of collecting relevant and reliable data, the study was

carried out using selected organizations in Lagos state as case study. To accomplish this

objective, the study was conducted and reported in phases or chapters. In the first chapter, the

social globalization as well as foreign direct investment were introduced and the motivations for

conducting the research were established. In chapter two, effort was made to examine and review

prior and contemporary literature on social globalization and its impact on foreign direct

investment in Nigeria. Next, was the methodology which described the detail procedure by

which the study was conducted, this was followed by the presentation and analysis of data

collected from respondents. The hypotheses earlier proposed for the study was equally tested at

this stage. The last phase of the work summarizes the findings and draws conclusions.

5.2 Summary of the Study

This research mainly investigates and examines the impact of social globalization foreign direct

investments in Nigeria. However, the study specifically intends to examine with a particular

interest on the impact of trade liberalization on foreign direct investments; the impact of

technology development on foreign direct investments, the impact of capital flow on foreign

direct investments; as well as the impact of global competition on foreign direct investments.

After presentation and analysis, the following findings are arrived at:

56
 i. There is positive and significant relationship between trade liberalization and

manufacturing productivity in the Nigerian business environment.

ii. There is positive and significant relationship between capital flow and manufacturing

productivity in the Nigerian business environment.

iii. There is a positive and significant relationship between technology development and

manufacturing productivity in the Nigerian business environment.

iv. Absence of excessive control of business by Nigerian governments has enabled business

organizations to record milestones.

v. Access to sufficient and adequate capital has been the basis for our improved productivity

in business organizations.

vi. Technology development enhances good product packaging and increases product values

in business organizations.

vii. There is increased competition in the Nigerian business environment due to

globalization.

viii. Due to low obstacle to flow of goods and services amongst companies globally, the

competitive landscape in the Nigerian business environment has changed drastically.

5.3 Conclusion

The study examined the effect of globalization on economic growth in Nigeria. Given the extent

of Foreign Direct Investment and trade openness, the study showed that the Nigerian economy is

gaining from globalization. This is shown by high GDP growth. The economy is yet to gain more

by diversifying its exports. The problem is not that the country is being exploited by the

57
economic super powers (like anti globalists would have us to believe), but that Nigeria is not

making the best use of resources that globalization brings.

The worst hit by this ugly situation are the Nigerian poor people with peasant and impoverished

majority in the midst of extremely few wealthy and corrupt individuals. Most of the poor practice

subsistence farming which excludes them from global integration. The oil sector of the economy

remains the dominant sector in the international transaction but majority of Nigerians are

deprived from enjoying its benefits. Unlike many other oil exporting countries Nigeria is yet to

make the best use of this resource.

The study concluded that Nigeria can use the international market for services to improve

economic governance and to provide necessary infrastructure (such as ports, electricity) as being

witnessed in the telecommunication sector in the country today. We can also say that more

successes in terms of economic growth from integration require not just open trade policies, but

also sound institutions and policies in a range of areas. Since Nigeria has opened up to foreign

trade and investment it achieved a better economic growth. Openness encourages adequate

investment from private sector and, hence, economic growth.

The study concluded that for Nigeria to achieve accelerated growth and development, it is highly

necessary to fully integrate her economy into global economies by removing all barriers to trade

and liberalize all the sectors of the economy.

5.4 Recommendations

In order for the country to fully benefit from globalization there is a need for stronger intuitions

and sound policies to facilitate international trade. There also needs to be improvement in

58
infrastructure (roads, electricity etc.) and security of the country as it will bring more Foreign

Direct Investment.

Efforts should be directed towards building and sustaining strong institutions as well as

providing necessary environment for boosting the potentials of optimizing the net positive

benefits of globalization in Nigeria.

that efforts should be made by government to boost overall and economic globalizations through

increasing export and trade, encouraging FDI and capital inflows.

The study recommends the creation of conducive environment to encourage FDI and to allow

trade openness. This could be through the creation of enabling environment like unceasing power

supply, good road and rail networks e.t.c.

To able to reap the surplus of a depreciated or even a devalued exchange rate, the government

and relevant participants should put in place policies to vary the production base of the Nigeria

economy.

Nigeria trade with the rest of the world should be further be opened.

59
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64
 APPENDIX
QUESTIONNAIRE

School of Post-Graduate Studies

Department Of public and
international affairs
University of Lagos,
Akoka- Lagos.
Dear Respondent,

I’m Ekeagu Rita Uche, I am a post-graduate student of the above named university, conducting a

research on “the impact of social globalization on foreign direct investment in Nigeria. You

have been chosen to be one of my respondents. I kindly request you to answer the questions

provided below according to the instruction given in each questions. Your responses will be

treated in strict confidence and be used for the purpose of this study only.

Thanks

Yours faithfully,

65
PART ONE
Instruction: Please tick [√ ] and fill in as appropriate.
Gender Age Marital Educational Organization Cadre

Status Qualifications

Male Below 25 Single [ ] WAEC /SSCE Chambers of Top level

[ ]
[ ] [ ] comm. &

Industries

Female 25 – 35 Married OND /NCE [ ] NBS Middle

[ ] [ ] [ ] level

35 – 45 Divorced HND/B.SC/B.A MTN Nig Plc Lower

[ ] [ ] [ ] level

45years And Widowed MSC/MBA [ ] Unilever Nig

Above [ ] [ ] Plc

Professional [ ]

66
PART TWO
Instruction: Please tick ( ) as it tallies with year answer.
Where: SA = Strongly Agree, A = Agree, U = Indifferent, T = Disagree, SD = Strongly
Disagree
s/n To what extent does trade liberalization SA A U D SD

influence foreign direct investment in Nigeria?

1 Trade liberalization encourages trade between my

company and its foreign partners.

2 Trade liberalization enhances the optimal

performance of my organization.
3 There have been no barriers to trade internationally
in manufacturing sector.
4 Free exchange of goods and services enabled by
globalization has helped my organization
immensely
5 Absence of excessive control of business by
Nigerian governments has enabled my organization
to record milestones.
Q2 Does technological advancement have significant SA A U D SD

impact on foreign direct investment in Nigeria?

6 Advanced technology enhances work processes and

procedures in my organization
7 Technology leads to good product innovation and
creativity in my organization.
8 Technology development enhances good product
packaging and increases product values in my
organization
9 There has been rapid dispersion of means and
methods of producing goods and services in my
organization.
10 The development of transport and
telecommunication technology, as well as the
internet has helped effective interactions and
communication in my organization
Q3 Does capital flow have significant effect on SA A U D SD

foreign direct investment in Nigeria?

67
 11 There has been capital inflow into my organization
from abroad as one of the benefit of globalization.
12 Globalization has enabled free movement of human
and financial resources into my organization for
effective operation
13 There is greater access to financial resources both
locally and internationally as a result of
globalization in my organization
14 Capital flow has enhanced economic growth, which
has enhanced the fortunes of my organization
15 Access to sufficient and adequate capital has been
the basis for our improved productivity in this
organization
Thank you for your cooperation

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