Effect of Foreign Direct Investment on Performance in the Telecommunication Industry in South-East, Nigeria.


The study investigated the Effect of Foreign Direct Investment (FDI) on the Performance of the Telecommunication Industry in South-East, Nigeria. It sought to: (i) determine the impact of technology on productivity in telecommunication firms in South-East, Nigeria.

(ii) ascertain the effect of competition on efficiency in the telecommunication firms, (iii) assess the effect of capital on profitability in telecommunication firms.

The population of the study was 4241 staff of six telecommunication service providers namely Airtel, Etisalat, MTN, Glo, Visafone, and Starcomms.

The sample size of 384 was obtained using Freund and Williams’ formula. Stratified sampling was used to select respondents from each of the selected institutions.

Data were collected using questionnaire designed on a 5- point Likert scale. To establish the reliability of instrument, a test retest method was adopted and the value obtained was 0.90 indicating that the test instrument was highly reliable.

The data obtained were presented in tables analyzed accordingly and the corresponding values were expressed in percentages.

All the hypotheses were tested using simple regression approach at 5% error. The findings revealed that: Technology had a significant positive impact on productivity in telecommunications firms in South- East, Nigeria (r = 0.957, p < 0.05);

Competition had positive effect on efficiency in the telecommunication firms (r = 0.944, p < 0.05); and Capital had significant positive effect on profitability in telecommunication firms in South-East, Nigeria (r = 0.894, p < 0.05).

The study concluded that FDI specifically had the effect of enhancing productivity, improving efficiency and ensuring profitability in the telecommunication firms, South East.

Table Of Contents

Declaration               i

Approval                           ii

Dedication                              iii

Acknowledgements                   iv

Abstract                                 v

List of tables                         vi


  • Background of Study 1
  • Statement of Problem 11
  • Objectives of Study 12
  • Research Questions 12
  • Research Hypotheses 13
  • Significance of Study 13
  • Scope of Study 14
  • Limitations of Study 14
  • Profiles of Organizations Understudied 15
  • Operational Definition of Terms 16

References                  20


  • Conceptual Framework 21
  • Theoretical Review 59
  • Empirical Review 67
  • Summary 71
  • Critique of the Review of the Related Literature 72

References                     73


  • Research Design 76
  • Source of Data 76
    • Primary Sources of Data 77
    • Secondary Source of Data 77
  • Population of the Study 78
  • Sampling and Sampling Technique 80
  • Description of Research Instrument 81
  • Validity of the Research Instrument 81
  • Reliability of the Instrument 81
  • Method of Data Analyses 82
  • Decision Rule 82

Reference                      83


  • Presentation of Data 84
  • Interview Responses 90
  • Test of Hypotheses 90
  • Discussion of Findings 96


  • Summary of Findings 98
  • Conclusion 98
  • Recommendations 99
  • Contribution to Knowledge 99
  • Suggestions for Further Studies 100

Bibliography                      101

Appendices                        104


Background Of Study

Foreign direct investment (FDI) is a major component of foreign investment.

FDI is generally investment made to acquire lasting interest in an enterprise operating in an economy other than that of the investor, the investor’s purpose being an effective voice in the management or control of an enterprise (IMF, 1977).

FDI, which is mostly carried out by multinational corporations, differs from portfolio investment in that the former does carry control over the borrowing entity while the latter may not involve any direct control over the use of lending funds (Olokoyo, 2012).

In recent years, FDI has gained renewed importance as a vehicle for transferring resources and technology across national borders.

As the developing world’s access to international capital in the form of official development assistance and commercial bank borrowing is shrinking due to a massive flow of funds from the Western world to the newly emerging market-based economies of Central and Eastern Europe, the poor countries are intensifying their efforts to attract FDI.

To succeed in this venture, Nigeria must identify the major factors determining the inflow of FDI (Olokoyo, 2012).

Nigeria as a country, given her natural resource base and large market size, qualifies to be a major recipient of FDI in Africa and indeed is one of the top three leading African countries that consistently received FDI in the past decade.


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