The Determinants of FDI in Nigeria and its Effects on the Growth of Research Proposal

The Determinants of FDI in Nigeria and its Effects on the Growth of SMEs - Research Proposal Example In this particular area, there are two approaches that are commonly applied namely the macro approach and the micro approach. Macro approach encompasses empirical examination of effects of FDI on the general economic growth in areas related to the creation of employment, business and industry as well as international relationships (Ip, 2010, p.90). On the other hand, the microeconomic approach focuses on the impacts of FDI on the grass root economy in various sectors like skills development, employment generation specifically the establishment of small businesses being highly emphasized on. Foreign direct investment refers to the direct investments made to businesses or production process in a given country by companies or individuals from other countries. This exercise is achieved by either buying the targeted business entity or by expanding corporates operations. In Rivers State Nigeria, FDI involves the movement of both financial and human resources (capital) from abroad. Some of these resources are owned by individuals, governments while others are owned by leading multinational corporates (Great Britain, 2009, p.102). There exists the number of factors that make Rivers State a favorable destination for many investors. Therefore, it is essential to have a brief understanding of the state that has become a target of many foreign investors. Rivers State is among the 36 states that Nigeria made up of (Mitee, 2010, p.85). The state contributes a lot to the Nigerian economy because of the presence of oil-rich fields, the presence of refineries and seaports among other various industries that spread out across the state. As a result, the state has become one of the most targeted areas by foreign investors who in this case comprises of both leading multinational corporations as well as individuals who travel to the state to seek employment.