Eating disorders and healthy eating Essay

Men make up 10 to 15 percent of the population with anorexia and bulimia, but are the least likely to seek help due to the gender stereotypes surrounding the disorders. a. Almost half of people in the United States personally know someone with an eating disorder, that half of the people in the class room know someone that has an eating disorder. b. Packing lunch , choosing restaurants wisely and keeping nutritious snacks on hand are just a few of the ways you can still manage to eat something and stay healthy at the same time. c. I would like to tell you more about healthy eating and what eating disorders and the effects are , how you can find out if some one you know has them and recognizing the symptoms d. What are the three types of eating disorders A. Anorexia Nervosa and Bulimia Nervosa and over eating Anorexia is a pathological fear of gaining weight leading to bad eating patterns, malnutrition, and u sually excessive weight loss and refusal to maintain a healthy weight. 1. When the person sees them self in the mirror they see extremely fat person, and to everyone else extremely skiny Bulimia is repeated binge eating followed by behaviors followed by purging to avoid weight gain 2. Taking laxative is also one the behaviors that people will take on to be able to lose the weight and be skinny Over eating is constantly eating without boundaries and past the appropriate amour of food or eating past the point of fullness 3. Some reasons are Boredom , anxiety and stress or even to please someone. B. Effects of eating disorders Treatments of eating disorders 1. Weight loss, fatigue, fainting, thin hair and nails Dehydration, menstrual irregularly, heart problems, took damge The worst one of all death Some therapy to talk about why the eating disorders is present and help the patient though it. 1. Most of the times eating disorders are issues that have gone untreated; and a way for people to feel like they have control over their lives. Medication that increases hunger for some and suppresses hunger for others

Self-Supervision and Plan

Clinical mental health counselors diagnose, treat, and test psychological disorders as well as support and teach clients skills needed for positive behavior changes. According to the 2012 American Mental Health Counselors Association’s (AMHCA) code of ethics â€Å"Mental health counselors believe in the dignity and worth of the individual. They are committed to increasing knowledge of human behavior and understanding of themselves and others. They use their skills only for purposes consistent with these values and do not knowingly permit their misuse by others.While demanding for themselves freedom of inquiry and community, mental health counselors accept the responsibility this freedom confers: competence, objectivity in the application of skills, and concern for the best interest of clients, colleagues, and society in general†. They promote clients well-being on multiple levels by providing prevention services and treatments for a wide range of clients in diverse sett ings (Gladding & Newsome, 2010). According to the AMHCA, â€Å"mental health counselors have a primary obligation to safeguard information about individuals obtained in the course of practice, teaching, or research.Personal information is communicated to others only with the person's written consent or in those circumstances where there is clear and imminent danger to the client, to others or to society. Disclosure of counseling information is restricted to what is necessary, relevant and verifiable†. Another role of mental health counselors would be to actively learn and promote as well as be sensitive to the different cultural, ethnic, and diverse backgrounds of their clients. Continuous education, research, and self-awareness are the competent counselor’s key to effective, safe, diverse, accepting, and empowering counseling treatment and career.With the growing diversity of the U. S. population, counselors are increasingly called on to make their services more widel y available in racially and ethnically diverse localities. Ethnic and racial disparities in mental health are driven by social factors such as housing, education, and income (Vasquez, 2007). According to Vasquez, providing services to specific populations and building a niche practice can help a counselor remain competitive, gain new experiences and clients, and become recognized as an expert in working with particular populations.â€Å"Developing awareness of cultural values — such as reliance on family support systems, collective decision making, spirituality and respect for peers — is paramount in reaching out to diverse populations. The ability to understand and respect a prospective client's belief system is crucial† (Vasquez, 2007). Cultural factors such as counselors’ gender and office environment (like artwork and furniture arrangement) may have a bearing on the demand for as well as the delivery of services.Counselor education faculty often urge students to celebrate diversity, but the average student is not equipped with knowledge of the components of the RESPECTFUL Counseling Cube (D’Andrea & Daniels, 2001). These include religion and spirituality (R), economic class background (E), sexual identity (S), psychological maturity (P), ethnic and racial identity (E), chronological stage (C), trauma (T), family background (F), unique physical characteristics (U), and geographical location (L).Assessing the differing views of the above domains by diverse clients will affect the counseling process and can be used as a guide to accommodate culturally diverse clients. It is time for the counseling profession not only to recognize multicultural and diversity issues, but to develop systematic and practical approaches for helping counselors address and adapt counseling practices with culturally diverse clients (LeBeauf, Smaby & Maddux, 2009).According to the American Mental Health Counseling Association (AMHCA), Clinical Mental Health Counselors who deliver clinical services must comply with state statutes and regulations governing the practice of clinical mental health counseling and adhere to all state laws governing the practice of clinical mental health counseling. In addition, they must also abide by all administrative rules, ethical standards, and other requirements of state clinical mental health counseling or other regulatory boards (AMHCA, 2012).Mental health counselors promote clients well-being on multiple levels by providing prevention services and treatments for a wide range of clients in diverse settings (Gladding & Newsome, 2010). The profession of mental health counseling is continuously changing and evolving. Some of those changes are pleasantly welcomed, while others are not so much. Mental health counselors must stay updated, educated, and involved in all aspects of the profession in order to best serve their clients.State and national policies on mental health counseling are there to p rotect everyone involved. State policies are designed to regulate the professional practice of mental health counseling. This regulation serves to protect the consumer by ensuring that their rights and dignity are not violated (Ford, 2006). Licensing and credentialing are essential to the profession of mental health counseling (Gladding & Newsome, 2010). Counselors must have the competencies to not only keep up with the constant change in public policies but to fight for the rights of their clients as well.Mental health counselors must possess a strong desire to help others as well as the ability to inspire confidence, trust, and respect. Wellness and self-care activities are essential to a counselor’s well-being and professional longevity. Knowledge of human behavior, social systems, self-awareness, diversity, and respect for human dignity are all required qualifications of a mental health counselor. Self-awareness is one of the most important qualities and behaviors of an e ffective counselor because it is a way to explore their personalities, value systems, beliefs, natural inclinations, and tendencies.To become self-aware is to become familiar with one’s worldviews and is often the first step for many in becoming self-improved through personal goal setting. Self-awareness is also empowering and therefore brings the counselor a better understanding of themselves and their clients. Morrisette (2002) describes how self-awareness impacts the counselor’s identity by helping them understand a myriad of situations from many different perspectives. This understanding enables them to seek out solutions with multiple approaches, and to understand and evaluate the consequences and outcomes of those approaches.Self-awareness is a critical component to the development and success of a counselor because it the key to ethical decision making in counseling (Remley & Herlihy, 2010). A counselor that is self-aware not only understands their clients but a lso empathizes with them which in turn helps in building trust and developing a more therapeutic relationship. Clinical mental Health Counselors help clients work through a wide range of personal issues from career changes to relationship problems, anger management, depression, self-image, stress, parenting, addiction, and suicidal thoughts.They have many different roles and responsibilities that it is almost impossible to identify them all, but most importantly they are obligated to develop and maintain a safe, trusting, and comfortable relationship for their clients at all times in order for the therapy to work. The mission of the American Counseling Association is to enhance the quality of life in society by promoting the development of professional counselors, advancing the counseling profession, and using the profession and practice of counseling to promote respect for human dignity and diversity (ACA, 2005).I believe that my past experiences, diverse cultural background, and e ducation will play a major role in my success as a mental health counselor. They have equipped me with the necessary tools to be an effective counselor. My familial experiences taught me to appreciate, respect, and love others. My cultural background taught me to never judge a book by its cover and to accept others for whom they are. My educational background in Medicine taught me how the human body works, and especially how genetics plays a major role on the development of the individual.As a future mental health counselor I would like to help those that have gone through or shared similar experiences as I have. My families’ refuge experience taught me immensely and shaped me into the person that I am today. Some of those life lessons are but not limited to: perseverance, patience, self-efficacy, acculturation, love, forgiveness, cultural diversity, advocacy, and respect for one’s self and others. I view my past hardships and challenges as tools that will guide me to fulfill what may possibly be my calling in life which is to counsel, educate, and empower those that went through similar situations as my family and I did.I would like to work in a private practice as a family therapist, or a refugee counselor, even for an advocacy group that would allow me to utilize my knowledge in the subject areas of refugee counseling, cultural/ethnic diversity, and immigrant counseling. As a refugee counselor I would not only focus on immigrants' time in the United States, but also on their reasons for leaving their homeland, their experience of migration, their resources to function in unfamiliar environments, and the receptiveness of the new country (both politically and socially) to their presence.My diverse background, education, and personal experience will allow me to understand and relate to my clients on a deeper level. Sue & Sue (2003) state that in order to be a culturally competent professional, one must first be aware of his or her own values and biases and how they may affect minorities. I believe that my personal life lessons have equipped me with the necessary tools to become an effective and culturally competent mental health counselor. The aim of counseling supervision should be supervision of the counselors own self supervision.As Confucius said, â€Å"Give a man a fish and you feed him for a day; teach him to fish and you feed him for a hundred years† (O'Hanlon & Wilk, 1987, p. 264). One of the most important qualities that I learned as a result of my family’s migratory experience would be that of self-confidence and self-efficacy. Fostering students’ confidence in their abilities to effectively work with the clients they intend to serve has been a longstanding goal of most counselor education programs (Bernard & Goodyear, 2004; Hensley, Smith, & Thompson, 2003).In general, those counselors who are more confident in their ability to use their clinical skills in real life settings often provide a h igher quality of counseling services to the clients they serve (Barnes, 2004; Bradley & Fiorini, 1999). One of the major approaches often used when investigating the process of gaining competence and self-confidence in particular domains of behavior has been self-efficacy theory (Bandura, 1989).Also called perceived ability, self-efficacy refers to the confidence people have in their abilities to successfully perform a particular task (Bandura, 1986). Counseling self-efficacy (CSE), according to Larson (1998), is best described as the beliefs or judgments an individual has about his or her capability to effectively counsel a client in the near future. It is an important factor related to the level of anxiety novice counselors experience as well as the amount of effort they put forth to learn advanced counseling behaviors (Larson, 1998).As a result, some counselor educators and researchers have suggested that increasing counseling trainees’ self-efficacy is a worthwhile traini ng goal (Larson, 1998) and that examinations of this construct should be included in both the research and evaluation of counselor competency and training effectiveness (Yuen, Chan, Lau, Lam, & Shek, 2004). Koob (1998) stated that â€Å"Therapist burnout and career changes, even after several years of being a therapist, can be traced back to ineffective supervision and that traditional models of supervision have been ineffective in promoting positive perceived self-efficacy in therapists in training.Therefore, the lack of self-efficacy greatly impacts the counselor’s effectiveness and competence levels. A supervision model that builds confidence and self-efficacy is needed for counselor success and career longevity. Such supervisory model would be the solution-focused which â€Å"emphasizes competence, strengths, and possibilities rather than deficits, weaknesses, and limitations† (Morrissette, 2002). Solution-focused supervision, in parallel with therapeutic practice , is about collaborating in a partnership  which pays attention to, and develops, the supervisee's interests, best intentions, and goals for their work (De Shazer, 1988).Solution-focused supervision focuses on abilities, learning, and strengths that the therapist already has. It also allows the therapist to acknowledge what services work best with their clients such as their skills, abilities, and creative ideas. Another area of strength would be developing the supervisee's preferred future or outcome and collaborating with the counselors and the clients regarding their work together where they focus on the goals and the solutions versus the problem.It also allows the counselors to take a ‘not-knowing’ position as well as uses scales to measure and develop progress while offering appropriate, evidenced compliments respectfully. On the other hand, solution-focused supervision requires the problem or challenge to be clearly identified in order for it to be successful; m ust present a problem in order to seek resolution. Identifying the problem sometimes may present challenges to the counselor‘s self-supervision model.This type of model allows the supervisees to evaluate themselves and identify and improve their own strengths and weaknesses which promote positive behavioral changes. Helping a refuge family of four adapt to their new surroundings is an example of solution focused supervision; guiding them through their acculturation process, where becoming competent of the family’s cultural beliefs, backgrounds, and worldviews through community resources and support groups.The counselor can research and educate themselves about all aspects of the client’s culture giving the counselor self-confidence to conduct effective counseling sessions. The Council for Accreditation of Counseling and Related Educational Programs (CACREP) defines counselor supervision as: A form of instruction where by a supervisor monitors and evaluates an int ernship or practicum student’s performance and quality of service provided, facilitating associated learning and skill development experiences (CACREP, 2009).According to the American Psychological Association, supervision covers a vast and diverse collection of responsibilities, including but not limited to: monitoring, evaluating, instructing, advising, modeling, consulting, supporting, foster autonomy within the supervisee and a responsibility to the patient, profession, system and society. Supervision also addresses legal and ethical issues that may arise, thus further emphasizing the importance of effective training within the mental health profession (www. apa. org).It is necessary to improve client care, develop the professionalism of clinical personnel, and impart and maintain ethical standards in the field. The quality and focus of supervision may have a direct impact on counselor development, service delivery, and, most important, client care; and therefore should n ot be taken lightly. Supervision is a key component of counselor growth and ongoing development (Campbell, 2006) and impacts counselors’ attitudes, clinical style, and practice (Allen, Szollos, & Williams, 1986; Magnuson, Norem & Wilcoxon, 2002).The type of supervision can vary depending on various aspects such as the supervisee’s place of internship and work environment, client population, financial resource, and diversity of clients. What appeals to some supervisees may not appeal to others? Some may not feel comfortable using the solutions focused supervision model as much as I do. This model stresses growth through increasing one’s self efficacy and boosting self-confidence which are vital aspects for me as a future mental health counselor that aspires to work with immigrant and refugee youth self-efficacy is.Supervision of counselors has been described as an on-going, essential, mutually advantageous, and impossible task (Borders & Brown, 2005; Bernard & Go odyear, 2004; Zinkin, 1989). Counselor supervision has undergone a variety of transformations since its emergence, however, the main goal of supervision remained the same which is to help guide counselors provide a better service to their clients which promotes growth and positive way of living.

Evaluation of Airport Security Measures Essay

Response and especially quick response to stresses may results to major loopholes and possible risky omissions. Mainly, this occurs due to lack of enough time to holistically evaluate the immediate issue at hand and possible local and international pressures. Since September 2001, US transportation systems security on terrorist attacks assumed vast urgency that saw major changes in the sector’s operations. The Congress passed the Airport Security Federalization Act of 2001 as the main platform for restoring the overall sanctity and integrity of the airports to secure the fast dwindling consumers confidence both locally and internationally. 1. Describe implementation issues of the airport security measures which were approved by Congress shortly after the incident on September 11 (i. e. Airport Security Federalization Act of 2001). To begin with, the act required that all the airport security screening personnel be federal employees and an estimated 20, 0000 new federal workers had to be hired. Smaller airports were required to employ local law enforcement agencies to provide security. However, ensuring that the transport funding needs are effectively identified and comprehensively prioritized is still a major challenge. Putting the security measures under the federal considerations in all the airports rose with a great deal the funds required by the new department of homeland security. Arguably, the Act did not immediately establish the direct input of the airports where the new security teams were deployed. With the current economic downturn, the Department of Homeland Security has expressed one of its operations setbacks as lack of enough funds to sustain these operations (Alexander & Seth, 2004). To add to that, effective harmony and coordination in the Department of Homeland Security and Department of Transport has proved to be a hard nut to crack altogether. As indicated earlier, bulk of the employees in airport systems were transferred to the Department of Homeland Security which has created an extended system of response to the major problems by the expanded panel (Marcus, 2004). Notably, scholars have indicated that September 11 Terrorist attack resulted from long time known vulnerabilities that indicated failure to pro-actively address them. Though an immediate operation system was established for running the airports, there was lack of clear long term focus on the management of the airports under the combined system. Ensuring the overall competence of the staff via high quality and staffing competence emphasis for the expanded workforce has been a major challenge since the passing of the Act (Robert et al, 2008). Arguably, the Department of Transport acknowledged of possible future stresses from the large demand for training and capacity building for the employees. This formed an extension of the prior challenges on funding and coordination between the private sector, the Department of Transport and the Department of Homeland security. Monitoring and supervision of this massive and highly integrative workforce widens the gap further due to the variance in approach (Robert et al, 2008). Whereas the private entities are direct after effective implementation of the law under al conditions, the private parties are after maximal profits which could compromise the whole agenda due to considerations of risk taking in a capitalistic setting. 2. Describe gaps in airport security, which were not addressed by these measures Arguably, the Airport Security Federalization Act of 2001 had major gaps that have seen slow implementation of its demands and reduced capacity to achieve the overall objectives. The main aim of the laws is to enhance better operations and maximum returns to the public and the government. However, the massive screening measures established never appreciated the difficulties that people go through to be cleared for flights. This has raised concerns locally and globally. To add to that, the law requires that only Americans can serve in the airport screening personnel (Subcommittee on Homeland Security, 2008). This was a major gap in promoting non professionalism and closing out innovations from the global outsourcing arena. Notably, laws preventing entry into the Cockpit have existed with little success in US and other countries. However, the Act emphasizes on the rule as a major preventive measure. This indicates possible disaster in waiting as it is entirely dependent on consciousness of the crew on board. To add to that, the act requires that the cockpit be equipped with stun guns for emergency purposes (Robert et al, 2008). However, this is another major loophole with analysts urgently calling for its reconsideration. Presence of ammunitions should be under a highly trained federal air marshal. Arguably, arms in the cockpit act as a possible supply to the terrorists after lacking possible ways to get theirs on board.

The debts deal's failure by Fareed Zakaria Essay

The debts deal's failure by Fareed Zakaria - Essay Example The paper tells that one must note before reading the aforementioned article that Mr. Fareed Zakaria is not your run of the mill reporter, observer, or opinion columnist. He is a highly regarded member of the journalistic field whose credentials include being the host of CNN's Fareed Zakaria, editor at large of Time Magazine, an all too important columnist of The Washington Post, and author of such famous works as The Post American World and The Future of Freedom. Mr. Zakaria started off his argumentative essay by presenting the facts as he knew them to be true to his readers. The information that he presented, about the filibustering in the legislative house and the constant bickering between the Republican and Democratic parties on the floor was information that could easily be gleaned from reading the newspapers or watching the daily news shows. The information that our debt ceiling was being held hostage by politics was something that came as surprisingly new for most of us. Main ly because we had always been used to seeing these two parties managing to find some middle ground within which to work from for the benefit of many. Sadly, it seems that the era of old, open communication, and amicable settlement politics is now an era of the past. These days, our national politics is, according to Zakaria has become a world wide failure because we can no longer make our political system work for ourselves. He continues to explain how our debt crisis would have been solved during the time of Reagan, Clinton and other previous American leaders: This is how Congress used to work: grand bipartisan bargains to solve difficult problems with compromises by both sides. This is not nostalgia. It is how the system worked in the 1980s and '90s to save Social Security, reform the tax code, rationalize immigration policy and close hundreds of military bases. (Zakaria, Fareed, The Debt Deal's Failure) Mr. Fareed does his utmost best within the article in order to present even t he most complicated of economic discussions in terms that lay people such are ourselves can easily understand. He has a grasp of the current economic situation that allows him to present a highly readable and focused piece that in the end, allows the reader to contemplate the reality of our economic situation locally and its effects on our nation worldwide. That is not an easy task for somebody as highly educated as Mr. Fareed and yet he manages to pull it off with each written paragraph in his commentary. He does not try to sway his reader towards one politicial inclination or another, he merely provides all of the information that he has on hand to help his reader come to certain conclusions on his own. The Debt Deal's Failure (Zakaria, Time Magazine) does its best to present an unbiased opinion on the topic. It however, fails dismally in that aspect because Mr. Zakaria makes it very clear from the get go that he is a firm believer in the economic programs of the Democrats and tha t the Republicans should be viewed as the bad guys who ran our economy into the ground. He often does argumentative analysis of the performance of the presidents Reagan, George H.W. Bush, Bill Clinton, George W. Bush, and finally Barack Obama in relation to increasing our countries debt woes. I find it quite disturbing that he was able to present factual data on the spending and borrowing for the Republican presidents but then failed to do the same for the Democrat president. It is highly impossible that our debt managed to balloon into the

TOPIC OF CHOICE, preferably pedophiles and paraphilias Essay

TOPIC OF CHOICE, preferably pedophiles and paraphilias - Essay Example All other physical contacts, in order to quench the thirst of carnal desires i.e. other than heterosexual relations, are considered as taboo, perversion and sexual deviation in large number of societies, cultures, states and countries. A person would be considered to be acting in a deviant way in society if they are violating what the significant social norm in that particular culture is. (Retrieved from freeessays.cc) The nature-nurture debate is one of the most enduring one with reference to the discipline of psychology, and in respect of discovering the development of personality. Social theorists stand pole apart in their observations in respect of the effect of the environment on the one hand and innate characteristics on the other in making up of a personality. Psychologists have defined various kinds and forms of sexual disorders, which cause perversion and deviation from the normal sex behavior of individuals. There are so many reasons of these disorders. Some of the theorists declare environment as the major reason behind such disorders, while few of them are of the opinion that biological and physical reasons are also involved in sexual perversion and deviant behavior. Man enters the world as a neat and clean biological organism, which learns how to behave from society by entering into continuous and constant interaction with the other members of his social arrangement. It is therefore, theorists view man’s behavior as the learnt one, which is highly supportive in his personality development and recognition of his role, position and responsibilities while interacting with his social surroundings. Hence, it is the socio-cultural background that maintains lion’s share in the growth of man’s personality and social behavior. Theorists are of the view that prevailing social norms, mores, values and activities prevailing in a community determine man’s superior and inferior habits and

Discussion 2 Coursework Example | Topics and Well Written Essays - 250 words

Discussion 2 - Coursework Example A lot of care was ensured to enhance the interviewees to have a great trust to support the shared learning experience. They ensured that they maximized on their learning by examining own reactions to the responses of the interviewees. They were at least two or three different researchers who interpreted each of the interviews (Kram, Wasserman & Yip, 2012). This clinical approach assumed that all the experiences of individuals are shaped by personal and contextual factors already known as the main theme of the research. The collaboration between the researcher and research participant enhanced the discovery and understanding of such multiple influences (Rousseau, 2005). Their hunch that the work identity of the interviewees was shaped by their work setting and their age and previous experiences in their career was confirmed by the responses given. The partnership with the first study enabled them to demonstrate differing career histories and current contexts in the work situations. Thus, the two studies greatly

Ronald Reagan, Lyndon B. Johnson and Franklin D. Roosevelt - most Essay

Ronald Reagan, Lyndon B. Johnson and Franklin D. Roosevelt - most dominant and active presidents of the United States of America - Essay Example President Roosevelt regarded public welfare considerations to eclipse individual autonomy in importance; however, he prepared to use the influence of the government to force people to act in the public interest. Unlike Roosevelt, we find that Ronald Reagan acknowledged or considered the government as being part of the problem and not the solution in the economic impasse. On the other hand, President Lyndon Johnson was the major proponent of the thought that the government, particularly a big national government, was the best solution to most of the problems of the United States. During the presidency of Johnson, the first debates regarding minimum wage was initiated, being extensively backed by the Equal Opportunities Office. These individuals believed that if the redistribution of income were to be done in an appropriate manner, then a ware rate would actually be a big step (Tim 56-85). Just like Reagan, we find that Johnson also had a dislike for communism and promised to bring it to an end in Vietnam.

"Modeling Money" Coursework Example | Topics and Well Written Essays - 250 words

"Modeling Money" - Coursework Example Also, it is unlike liquidity preference model that assumes all economic factors are constant hence the consumer’s decision to hold cash is dependent on supply and demand. Second quantitative easing (QE2) was a strategic government policy aimed at reducing the mortgage rate and Treasury yields, as well as increase economic stimulus through the large-scale purchase of assets. It led to the decline of yields on longer-maturity Treasuries and other securities following the Federal announcement of its intention to increase its holding of longer-term securities (Christensen & Gillan, 2014). This may have been caused by expectations of a decline in risk premiums for longer-term debt securities. Also, the strategy may have had temporary effects of increasing market liquidity and lowering liquidity premiums for long-term investments. QE2 conforms to the liquidity preference theory that presume investors have a preference for premium for securities with longer maturity bearing the greater risk while they have a preference for holding cash since it involves minimal risk. Christensen, J. H. E. & Gillan, J. M. (July 2014). FEDERAL RESERVE BANK OF SAN FRANCISCO WORKING PAPER SERIES: Does Quantitative Easing Affect Market Liquidity? Retrieved on 11th 2015 from

Sale of Goods and Agency Section 14 Assignment Example | Topics and Well Written Essays - 1000 words

Sale of Goods and Agency Section 14 - Assignment Example The shopper made their purpose for which they intended to use it but the trader did supply that specific commodity that could be used in that specific manner. The court issued a verdict that the goods were not worth for the use and that the client had declared the intention for the goods. â€Å"Caveat emptor† is a forewarning to customers to exercise caution when making purchase of a product in order to avoid deceit by the fraudulent traders who may cone them of their money or products or even supply substandard goods at an exorbitant price. During the transfer of property in merchandise, clients are advised to take caution to verify the value of those merchandise and ensure that there will serve the intended purpose4. This is imperative in order to reduce the legal cases relating to the sale of inferior supplies. In Bartlett v Sidney Marcus [1965] 2 All ER 753, lord Denning declared that merchantability refers to use of good for some specific purposes and that this did not re quire the good to be useful in all aspects per se5. It was for the same reasoning that in Thain v Anniesland trade centres [1997] SCLR 991 the car with fault gearbox was still considered to be of superior value6. According to section 14(2) it is presumed that traders in their ordinary duties are obliged to supply their clients with goods that meet their required value7. However, the law does not offer specific characteristics of assessing the quality of goods. Thain v Anniesland trade centre [1997] SCLR 991, the buyer purchased a second hand car whose gearbox was faulty. However, the court gave a verdict that the car was of right superior value.8 However, in Britvic Soft Drinks v Messer UK Ltd [2002] EWCA Civ 548, the supplier was held responsible for distributing tainted carbon dioxide gags which was to be used for manufacturing soft drinks9. According to the revised act, of 1992, section 14(2) defines product as fit for the reason it was intended for if it is able to serve all rea sons10. It should also physically satisfy the buyers need. In ss.14 & 15 SGA 1979, the buyer should have been given sufficient time to check for any fault, security and stability. However, this may not apply if the clients were aware of the issue which is making the good unworthy for the use it was intended, where the buyer was given an opportunity to examine the good before making purchase or if the sale was by sample there was an opportunity for the buyer to inspect the sample11. According to ss.14 & 15 SGA 1979, the seller is not accountable in regard to the security of the goods in case they have a flaw which could not be recognized at the time of the sale or if the declaration of this flaw could not the arrangement of the agreement12. In Grant v The Australian Knitting Mills ([1936] A.C. 562), the plaintiff had contracted dermatitis after putting on woollen garments manufactured by the defendant because of presence of sulphite and that the client used them for a week unwashed. The court verdict was that defendant was answerable for the distress experienced by the plaintiff13. From this case, the law holds that goods are fit for the right purpose and are considered acceptable if the buyer would still purchase them without making request for

Marketing Information System Essay Example for Free

Marketing Information System Essay INTRODUCTION: Marketing was the first functional area to exhibit an interest in MIS. Shortly after the MIS concept originated, marketers tailored it to their area and called it the MKIS (MARKETING INFORMATION SYSTEM). Early graphic models of MKISs provide a basis for organizing all functional information systems. The MKIS consists of three input subsystems: AIS, marketing research, and marketing intelligence. The output subsystems address the information needs of the four ingredients of the marketing mix (product, place promotion, and price), plus an integration of the four. SUMMARY: FUNCTIONAL ORGANIZATIONAL STRUCTURE The term organizational structure refers to how the people in an organization are grouped and to whom they report. One traditional way of organizing people is by function. Some common functions within an organization include production, marketing, human resources and accounting. FUNCTIONAL INFORMATION SYSTEMS FIS also known as functional information system may be described as a computer program system which processes the daily information’s such as TPS (Transaction Processing Systems). MARKETING PRINCIPLES One definition states that marketing â€Å"consists of individual and organizational activities that facilitate and expedite satisfying exchange relationships in a dynamic environment through the creation, distribution, promotion, and pricing of goods, services and ideas.† THE MARKETING MIX The objective is to develop strategies that apply these resources to marketing the firm’s goods, services, and ideas. The marketing strategies consist of a mixture of ingredients called the Marketing Mix: product, promotion, place, and price. They are known as the four Ps. Product – is what the customer buys to satisfy a perceived want or need. A product can be a physical good, some type of service, or an idea. Promotion – is concerned with all the means of encouraging the sale of the product, including advertising and personal selling. Place – deals with the means of physically distributing the product to the customer through a channel of distribution. Price consists of all the elements relating to what the customer pays for the product. EVOLUTION OF THE MARKETING INFORMATION SYSTEMS CONCEPT In 1996 Professor Philip Kotler of Northwestern University used the term marketing nerve center to describe a new unit within marketing to gather and process marketing information. He identified the three types of marketing information. These are the following: Marketing Intelligence information that flows into the firm from the environment. Internal Marketing Information information that is gathered within the firm. Marketing Communications information that flows from the firm outward to the environment. EARLY MARKETING MODELS Brien and Stafford were among the first modelers. Basing their design on the four Ps and emphasizing the development of strategic marketing programs. King and Celand stressed strategic planning; whereas Kotler, Montgomery, and urban, and Crissy and Mossman emphasized decision support. These modeling efforts began in the 1960s and continued into the 1970s. MARKETING INFORMATION SYSTEM MODEL It consists of a combination of input and output subsystems connected by a database. Output Subsystems Each output subsystems provides information about its part of the mix. * Product Subsystems provides information about the firm’s products. * Place Subsystems provides information about the firm’s distribution network. * Promotion Subsystems provides information about the firm’s advertising and personal selling activities. * Price Subsystems helps the manager make pricing decisions. * Integrated-Mix Subsystems which enables the manager to develop strategies that considers the combined effects of the ingredients. Database A structured collection of data. The data that is used by the output subsystems comes from the database. Input Subsystems * Accounting Information System gathers data describing the firm’s marketing transactions. * Marketing Intelligence Subsystems gathers information from the firm’s environment that has a bearing on marketing operations. * Marketing Research Subsystems conducts special studies of marketing operations for the purpose of learning customer needs and improving marketing efficiency. ACCOUNTING INFORMATION SYSTEM The collection, storage and processing of financial and accounting data that is used by decision makers. An accounting information system is generally a computer-based method for tracking accounting activity in conjunction with information technology resources. The resulting statistical reports can be used internally by management or externally by other interested parties including investors, creditors and tax authorities. Data for Preparation of Periodic Reports A classic example of how marketing information can be provided by the AIS (Accounting Information System) is sales analysis. Sales Analysis is the study of the firm’s sales activity in terms of which products are being sold, which customer are buying the products, and which sales representatives are selling them. Data for Preparation of Special Reports The vast majority of data that is used to respond to managers’ database queries likely comes from the AIS, e.g. to prepare a sales analysis using 4GL. Data for Mathematical Models and Knowledge-Based Systems A mathematical model is a description of a system using mathematical concepts and language. The process of developing a mathematical model is termed mathematical modeling.

Effect of Foreign Direct Investment on Nigerias Development

Effect of Foreign Direct Investment on Nigerias Development Chapter One 1.1 Introduction The drying up in the early 1980’s of commercial bank lending to developing economies made most countries eased restriction on foreign direct investment (FDI) and many aggressively offered tax incentives and subsidies to attract foreign capital (Aitken  and Harrison, 1999). Private capital flow to emerging market economies reached almost $200 billion in 2000. This is almost four times larger than the peak commercial bank lending years of the 1970’s and early 80’s. FDI now accounts for over sixty percent of private capital flow (Levine and  Carkovic, 2002). However, while the explosion of FDI flow remains unmistakable, the growth effect remains unclear. Foreign direct investment (FDI) has been a topic high on the policy agenda in emerging markets. This is due to the contributions FDI make to a country’s external financing and economic growth. The extent of regulation of FDI and other form of capital flow are also issues policymakers take a stand on and economic research has devoted a large effort to these issues. The experience of small number of fast-growing East Asian newly industrialized economies (NIEs), and recently china, has strengthened the belief that attracting FDI is needed to bridging the resource gap of low-income countries and avoiding further build-up of debt while directly tackling the cause of poverty (UNCTAD, 2005). Even though the Asian crisis sounded a cautionary note to premature financial liberalization the call for more accelerated pace of opening up FDI have intensified on the assumption that this will bring not only more stable capital inflow but also greater technological know-how, higher paying jobs, entrepreneurial and workplace skills and new export opportunities (Prasad  et  al., 2003). The increased importance of FDI has brought about international relationships, trade and policies materializing into export and imports between nations. This in turn results financial rewards to host countries. Policy makers across the region of Africa have hoped that attracting FDI with the bait of high tariff protection and generous incentives packages would provide the catalyst for a â€Å"late industrialization† drive (Thandika, 2001). The debt crises in the early 80’s and policies introduced by several countries in Africa also witnessed increased FDI as necessary for economic development. The pursuit of responsible macroeconomic policies combined with an accelerating pace of liberalization, deregulation and above all privatization were expected to attract FDI to Africa (WorldBank, 1997).  However, the record of the past two decades with respect to reducing poverty and attracting FDI as a result of policy changes has been disappointing at best (Ayanwale, 2007). The importance of FDI varies across different sector in the recipient countries. However, in all major country groups, the extractive sector accounts for a significant share of inflow of FDI: for example, Australia, Canada and Norway among developed countries; Botswana, Nigeria and South Africa in Africa; Bolivia, Chile, Ecuador and Venezuela in Latin America and the Caribbean; and Kazakhstan in South-East Europe and the  CIS  (UNCTAD, 2006a). The important of this sector is due to the fact that oil and gas are crucial to the contemporary global economy and their prices are key components of economic forecasts and performance. Crude oil and refined petroleum products constitute the largest single item in international trade, whether measured by volume or value (Steven, 2005). Thus, oil and gas are strategic resources in national, regional and global economies. Despite this significant and strategic influence, empirical evidence suggests that oil and gas abundant economies are among the least growing economies (Sachs and Warner, 1997,  Gelb, 1988, Stevens, 1991, Steven, 2005). This phenomenon is often conceived within the prisms of the â€Å"resource curse† and â€Å"Dutch disease†. Both of which are manifestations of inefficient utilization of resources rather than the inevitable outcome of the availability of oil and gas resources.  The impact of FDI on economic growth of recipient country has been one of varying opinions among authors. A huge literature exists concerning different effects of foreign investment on economic development in a recipient economy. Currently FDI sustains the most dynamic development in the world economy in comparison with other forms of foreign financing (De Gregorio, 1992). Most theoretical and empirical findings (see chapter 3) imply that FDI has a strong positive growth impact on the recipient economy. Within the African context, the Nigerian economy is a unique case, not because it is a developing economy and is quite large, but because during last 15 years the country has not managed to attract significant amounts of FDI (Asiedu, 2002). Typically investment risks are so high in Nigeria that only high profits in export oriented extractive industries (e.g. fuel industry) have attracted much foreign direct investment. This sector exerts a prominent influence on the economy as a key revenue earner. While oil and gas resources have very high revenue yields due to increasing international demand the question of aggregate FDI impact on economic growth remains an open question. This paper attempts to find some answers.   Over the last decade, the Atlantic Ocean off the coast of Western and Southern Africa has become one of the most promising oil exploration areas in the world with a convergence of interest between African governments, multinational oil companies, international Financial Institutions  (Jerome  et  al., 2007). Nigeria falls among the six countries which have become key players in the world of energy stake. However, the economic record and lived experience of mineral-exporting countries has generally been disappointing. The World Bank classification of Highly Indebted Poor Countries include: twelve of the world 25 most mineral dependent states and six most oil dependent. When taken as a group, all â€Å"petroleum rich† less developed countries has witnessed erosion in their living standards and many rank bottom one-third of United Nations Human Development Index. In addition to poor growth records and entrenched poverty, they are also characterized by high level of corruption and a low prevalence of democratization  (Jerome  et  al., 2007).† 1.2 FDI Defined Various classifications have been made of foreign direct investment. For instance, FDI has been described by the Balance of Payment Manual 5th  edition (BPM5) as a category of international investment that reflects the objective of a resident in one economy (the direct Investor) obtaining a lasting interest of a resident in another economy (the direct investment enterprise). The lasting interest implies the existence of a long-term relationship between the direct investor and the direct investment enterprise and a significant degree of influence by the investor on the management of the enterprise. A direct investment relationship is established when the direct investor has acquired 10 percent or more of the ordinary shares or voting power of an enterprise abroad (IMF, 1993). This comprises not only the initial transaction establishing the FDI relationship between the direct investor and the direct investment enterprise but all subsequent capital transactions between them and among affiliated enterprises resident in different economies (Patterson  et  al., 2004). Once a firm undertakes FDI, it becomes a  multinational enterprise  (MNEs). Policymakers believe that foreign direct investment produces positive effects on host economies. Some of these benefits are in the form of  externalities  and the adoption of foreign technology which could be in the form of licensing, agreements, imitation, employee training and the introduction of new processes by the foreign firms (Alfaro  et  al., 2004). Multinational enterprises are said to diffuse technology and management know-how to domestic firms (Tang  et  al., 2008). FDI is conventionally used as a proxy to measure the extent and direction of  MNE  activities (Jones, 1996). Like any other business,  MNEs  have a major objective of maximizing profit and reducing costs. Hence,  MNEs  consider regions with higher returns on investment and enabling environment for business success. This is one of the reasons for more FDI in some places than others. Accordingly  MNE  will invest higher in regions that provide the best mix of the traditional FDI determinants (Berg, 2003). The motivation for investment by multinationals in certain countries much more than others  is discussed elaborately in chapter three 1.3. Background The involvement of  MNEs  (through FDI) in extractive industries has had a chequered history. In the early twentieth century, these industries accounted for the largest share of FDI, reflecting the international expansion of firms from the colonial powers. With a growing number of former colonies gaining independence after the Second World War, and the creation of the Organization of the Petroleum Exporting Countries (OPEC) in 1960, the dominance of these  MNEs  s declined, as did the share of extractive industries in global FDI. From the mid-1970s, in particular, the share of oil, gas and metal mining in world FDI fell steadily as other sectors grew much faster. However, as a result of rising mineral prices, the share of extractive industries in global FDI has recently increased, although it is still much lower than those of services and manufacturing. It is therefore an opportune timeto revisit the impact of FDI into theextractive industries has on economic development. Measuring the effect of FDI on economic growth occupies a substantial body of economic literature. Many theoretical and empirical studies have identified several channels through which FDI may positively or negatively affect economic growth (Akinlo, 2003,  Mello, 1997). Not many studies have reported on the effects of FDI in Africa and most existing studies have concentrated on economies with high FDI in the manufacturing industries unlike economies with high FDI inflow in the extractive sector (as the case of Nigeria). Several factors suggest that the indirect benefits of FDI maybe less in extractive sector especially oil industries. Reasons given for this are that: firstly, the extractive sector (such as oil  sub-sector) is often an enclave sector with little linkages with the other sectors. Secondly, the knowledge and technology embedded in the sector is extremely capital intensive and so transfer of knowledge and technology maybe less. Also, the capital requirement and large economies of scale may not attract new entrants into the sector as in the manufacturing sector.  Furthermore, not all sector of the economy have the same potential to absorb foreign technology or create linkages with the rest of the economy (Hirschman, 1958).  Finally, sales in this sector are foreign market oriented and require fewer input of materials and intermediate goods from local suppliers. Hence will have less forward and backward linkages  (Akinlo, 2004). The  sensitivity of project to world commodity pric e also make it been view as a volatie sector (WorldBank, 2005) Given the pattern of foreign direct investment flow to Nigeria (mostly in oil and gas sector) and the angst-ridden as regards the benefits from the extractive FDI, it is apposite to examine empirically the situation in Nigeria. This constitutes the objective of this research. An analysis of this will be done for the period between 1980 and 2006 1.4  Overview of Foreign Direct Investment 1.5  Natural Resources and Economic Development Since the 1950’s, economists have been concerned that economies dominated by natural resources would somehow be disadvantaged in the drive for economic progress. In the 1950’s and 1960’s, this concern was based upon deteriorating terms of trade between the â€Å"centre† and â€Å"periphery† (Prebisch, 1964) coupled with concern over the limited economic linkages from primary product exports to the rest of the economy (Hirschman, 1958). In the 1970’s, it was driven by the impact of the oil shocks on the oil exporting countries (Wijnbergen  and Van, 1986,  Mabro  and Monroe, 1974). In the 1980’s, the phenomenon of â€Å"Dutch Disease† (the impact of an overvalued exchange rate on the non-resource traded sector) attracted attention (Corden, 1984). Finally in the 1990’s, it was the impact of revenues from oil, gas and mineral projects on government behaviour that dominated the discussion (Stevens, 1991,  Gelb, 1988). The common thread running through these concerns is that the development of natural resources should generate revenues to translate into economic growth and development. Thus the revenues accruing to the economies should provide capital in the form of foreign exchange overcoming what was seen as a key barrier to economic progress. This could be explained both in terms of common sense (more money means a better standard of life) and development theories the requirement for a â€Å"big-push† (Murphy  et  al., 1989), capital constraints (Lewis, 1955,  Rostow, 1960) and dual-gap analysis (Shibley  and  thirlwall, 1981). However, the reality appeared to be the reverse. Countries with abundant natural resources appeared to perform less well than their more poorly endowed neighbors. Thus the term â€Å"resource curse† began to enter the literature (Vanderlinde, 1994). More recently there has been a revival of interest in the phenomenon of â€Å"resource curse†. Furthermore, this has drawn the attention of a much wider audience than previously. Growing concern among a number of non-governmental organizations (NGO’s) regarding the negative effects of oil, gas and mineral projects on developing countries has had several effects. It has forced the World Bank group to consider their role in such projects. This has culminated in the creation of â€Å"the Extractive Industry Review† based in Jakarta to consider whether the World Bank Group should, as a matter of principle, have any involvement with such projects. Disagreement within and between the World Bank and the IMF have further fuelled the debate over how such revenues should be managed.   NGO  concern has also encouraged the more responsible petroleum and mineral corporations to consider the impact of their investment in such projects on the countries concerned. However, in the literature that has focused on â€Å"resource curse†, there are references to countries that allegedly managed to avoid a â€Å"curse† and instead received a â€Å"blessing†. For example, even the report produced by  Oxfam  America (Ross, 2001) which is strongly negative towards such projects, states †¦ â€Å"There are exceptions: some states with large extractive industries – like Botswana, Chile and Malaysia – have overcome many of the obstacles †¦ and implemented sound pro-poor strategies†. There are similar references elsewhere to â€Å"success† stories – Botswana (Hope, 1998, Love, 1994), Chile (Schurman, 1996), Indonesia (Usui, 1996), Malaysia (Rasiah  and Shari, 2001), and Norway (Wright and  Czelutsa, 2002). Nigeria is Africa’s most populous country with close to 132 million inhabitants. However, approximately 55% of the population lives on less than the value of one US dollar per day. The Nigerian economy depends heavily on the oil sector, which contributes 95% of export revenues, 76% of government revenues and about a third of gross domestic product. Before the establishment of democracy in 1999, the country was governed by military generals, under whose rule Nigeria’s economic performance had taken a beating for 15 consecutive years (Datamonitor, 2007). Nigeria has a dual economy with a modern segment dependent on oil earnings, overlaid by a traditional agricultural and trading economy. At independence in 1960 agriculture accounted for well over half of GDP, and was the main source of export earnings and public revenue. The oil sector, which emerged in the 1960s and was firmly established during the 1970s, is now of overwhelming importance to the point of over-dependence. Undoubtedly, Africa and indeed Nigeria is facing an economic crises situation featured by inadequate resources for long-term development, high poverty level, low capacity utilization, high level of unemployment and other Millennium Development Goals (MDGs) increasingly becoming difficult to achieve by 2020. Foreign direct investment has assumed prominent place in her strategy as a way of boosting economic rival and growth. It is also seen by policy makers at all levels as a way of bridging the resource gap of the country and avoiding further debt build-up (UNCTAD, 2005). This has brought about several changes in policy and regulations in order to encourage foreign investor to invest in the country. Other measures include – the liberalization of the foreign investment regime to allow major foreign ownership, lifting foreign exchange controls and the privatization of Nigeria’s public enterprises. This research is aimed to take an in-depth analysis of the major private capital flow foreign direct investment to a growing economy; Nigeria. This investment trend will be narrowed down to the extractive sector and in particular the oil and gas sector with the aim of investigating how investment in this sector translate to economic growth. 1.6 Research Gap During the last decade, a number of interesting studies in the role of foreign direct investment in stimulating economic growth has appeared. Several authors have observed that the major reason for increased effort in attracting more FDI has been stemmed from the belief that FDI has several positive effects (Levine and  Carkovic, 2002, Caves, 1996). In contributing to the importance of FDI, it has also been shown that FDI is three times more efficient than domestic investment (De-Gregorio, 2003). Available evidence for developed countries seems to support the idea that productivity of domestic firms is positively related to the presence of foreign firms (Globerman, 1979). The result for developing countries are not clear, with some finding positive spillover (Blomstrom, 1986,  Kokko, 1994), and others reporting limited evidence (Aitken  et  al., 1997). Earlier studies on FDI showed that target countries receive very few benefits and in most cases negative effect on economic growth (Singer, 1950;  Prebisch, 1968;  Saltz, 1992;  Bos  et  al., 1974 cited in (Katerina  et  al., 2004). A positive  effect is only contingent on the ‘absorptive capacity’ of the host country  (Durham, 2004).  Many research have shown that FDI stimulates economic growth (Borensztein  et  al., 1998, Amy Jocelyn and  Kamal, 1999) as seen in china’s economic growth (Dees, 1998 cited in (Ayanwale, 2007) and Latin American countries (Mello, 1997) showing that inflow of capital brings about increase in investment level. FDI has also been shown to have both a positive and negative effect on economic development depending on the variables[1]  that are used along side the test equation  (UNCTAD, 1998; 1999). Its effect has also been more positively acclaimed in countries with higher institutional capabilities (Olofsdotter, 1998) and economically less advanced countries (like Philippines and Thailand) but negatively on more economically advanced countries like Japan and Taiwan (Bende-Nabende  and Ford, 1998). In essence, the impact FDI has on growth of any economy may be country an period specific and as such there is a need for country specific studies. Several studies have shown varying relationship between FDI and economic growth in Nigeria. For example,  Odozi  (1995)  study showed that Structural Adjustment Policies (SAP hereafter) of Nigeria contributed to the FDI-growth relationship. He revealed that macro-policies before SAP discouraged foreign investors.  Ogiogo  (1995) reported a negative contribution of public investment to GDP growth for the reason of distortion. However, positive linkage effect of FDI-growth relationship was shown by  Aluko  (1961). Private domestic investment was also shown by  Ariyo  (1998)  to contribute positively to raising GDP-growth rate for the period 1970-1995. Oyinlola  (1995) using  Chenery  and Stout’s two-gap model found a positive relationship between FDI and economic growth.  Ekpo  (1995) using time series data revealed that political regime, real income per  capita, inflation rate, credit rating and debt service were key factors explaining variability  in FDI into Nigeria. Using unrelated regression model, FDI was shown to be pro-consumption and pro-import hence showing a negative relationship to domestic investment (Adelegan, 2000 cited in  Ayanwale, 2007) and statistically insignificant effect was shown for FDI-growth (Akinlo, 2004). More recent findings by  Ayanwale  (2007) revealed that FDI contributes positively to Nigeria’s economic growth with the communication sector accounting for the highest potential to grow that economy. He also opined that FDI in the manufacturing sector has a negative relationship with economic growth suggesting that the business climate is not healthy enough for the manufacturing sector to thrive and contribute to positive growth. Crude oil discovery and exploration has been said to have both positive and negative effect on Nigeria. The negative side is seen in term of the environmental degradation, deprived means of livelihood and other economic and social factors experienced by surrounding communities where the oil wells are exploited while the positive side is viewed from the large proceeds from domestic sale and export of petroleum products. However, its effect on the growth of the Nigerian economy as regards returns and productivity is still questionable (Odularu, 2007). This review shows that the debate on the impact of FDI on economic growth is far from being conclusive. The role of FDI can be country specific and its relationship with growth can either be positive, negative or insignificant depending on the macroeconomic dispensation (economic,  institutional  and  technological  conditions) in the recipient country (Zhang, 2001). Even though none of these studies controlled for the fact that must of the FDI was concentrated in the extractive industry, they did not specifically investigate the relationship between oil-FDI and economic growth. This is the focus of this study. 1.7 Research Objectives and Questions Few research on FDI into Sub-Saharan Africa have shown empirical evidence of FDI and economic growth as ambiguous (Ayanwale, 2007). In theory FDI is believed to have several positive effects on the economy of host country (such as productivity gains, technology transfers, the introduction of new processes, managerial know-how and skills, employee training etc), promoting its growth and in general, a significant factor in modernizing the host country’s economy (Katerina  et  al., 2004). However, there is no clear understanding of its contribution to growth (Bora, 2002). This research was driven by the following questions: Has foreign direct investment into Nigerian oil and gas sector brought about economic development? What is the transmission mechanism through which FDI brings about growth 1.8 Methodology 1.9 Dissertation Outline The rest of the paper is organized as follows: Chapter Two: This chapter is the literature review and shall be discussed in three subsection. The first two sections shall seek to review the theories and motivation for Foreign direct investment and the third section deals with the theoretical and analytic review of literature on FDI Growth linkages. This shall seek to answer the question on the mechanism through which FDI result in economic growth. Chapter Three: This chapter discusses the case study Nigeria and reviews the contribution performance and challenges of the oil and gas sector in Nigeria. Also, the impact of this sector on economic growth is discussed. Chapter Four: The methodology and theoretical framework for the analysis is the objective of this chapter. This section discusses the research approach and data collection mode. The variables for analysis and the model for shall be derived. Chapter Five: Data Analysis of the result and findings shall be the aim of this chapter. Chapter Six: This chapter shall form the conclusion of the research and give a summary of the findings, suggestion for improving economic growth in Nigeria and recommendation for further study. Chapter Three Literature Review 3.0 Introduction Foreign direct investment is in general motivated by both â€Å"pull† and â€Å"push† factors. The push factors are external to developing countries and focuses majorly on growth and financial market conditions in industrial countries. On the other hand, the pull factors are dependent (on a lot of factors) domestic policies and characteristics of host countries. While the push factors determine the totality of available resources, the push factors determine its allocation between countries (Ajayi, 2004). The diversity of theoretical and empirical explanations for the impact and influence of FDI (and growth) is without doubt very rich. Many studies among others have emphasized conducive macroeconomic policy, increased liberalization of markets, large domestic markets, liberal trade regime, low labour cost, availability of natural resources, good infrastructure and investment in human capital (bring about an educative workforce) (Ajayi, 2003). This review therefore draws from many of these works with the particular aim of providing an understanding of the theoretical and empirical background, views and present thought on the relationship between FDI and economic growth. The discussion shall be presented in three sections. The first two sections shall discuss the theories and motivation for FDI and the third section involves theoretical and empirical review of the literature of FDI and economic growth from four perspectives: trade or export (openness), linkages and spillover effect, knowledge and technology transfer and human capital. 3.1 Theories of FDI FDI can take the form of a Greenfield investment in a new facility or an acquisition of or merger with an existing local firm. Majority of cross-border investment is in the form of merger and acquisition rather than Greenfield investments. According to estimates by United Nations, 40 to 80 percent of all FDI inflows between 1998 and 2005 were in the form of mergers and acquisition (Hill, 2009). However, FDI flows into developed nations are different from those of developing nations. For developing nations only about one- third of FDI is in the form of cross-border merger and acquisition. This may simply reflect the fact that there are fewer firms to acquire in developing nations (Hill, 2009). For the purpose of this research, I have concentrated on two theories of FDI which are relevant to the study. The first perspective explains why firms in the same industry often undertake FDI at the same time and why certain locations are favoured over others (i.e. the observed pattern of FDI). The second is known as the eclectic paradigm. This perspective is eclectic because it combines the best aspects of other theories into a single explanation. In proceeding with the discussion, we define some terms. When goods are produced at home and then shipped to the receiving country for sale, it is known as exporting. The process of granting a foreign entity (the licensee) rights to produce and sell the firm’s product in return for a royalty fee on every unit sold is known as Licensing. Foreign direct investment has been view as an expensive and risky venture compared to exporting and licensing. This is because firms bear the cost of establishing production facilities in a foreign country or acquiring a foreign enterprise and the risk of doing business in countries with different culture. In exporting, firms need not bear cost associated with FDI and risk can be reduced by the use of local sales agents. Similarly, under licensing, the licensee bears the cost and risks. However, it is worth noting in summary that firms will choose FDI over exporting as an entry strategy when transportation costs or trade barriers make exporting unattractive. Furthermore, firms will favor FDI over licensing (or franchising) when it wishes to maintain control of technological know-how or over its operations and business strategy or when firm’s capabilities are simply not amenable to licensing (Hill, 2009). 3.1.1 The Pattern of FDI 3.1.1.1 Strategic Behaviour The idea that FDI flow reflects strategic rivalry between firms in the global marketplace is the basis for one of the theories of FDI. In studying the relationship between FDI and rivalry in oligopolistic industries F. T. Knickerbocker proposed a variation to this argument. An oligopoly is an industry made up of a small number of large players (for example, an industry in which four firms control 80 percent of a domestic market). One key features of such market is the interdependence of major players: the action of one firm have immediate impact on the major competitors, forcing a response in kind. This interdependence leads to imitative behaviour; rivals are usually quick to imitate opponents in and oligopoly – â€Å"the bandwagon effect†. Imitative behaviour can take many forms in an oligopoly. Some good examples are price war and capacity increase. Rivals imitate lest they be left at a disadvantage in the future. F. T. Knickerbocker argued that the same kind of imitative behaviour characterizes FDI. Although Knickerbockers’ theory and its extensions can help to explain imitative FDI behaviour by firms in oligopolistic industry, it does not explain the choice and efficiency of FDI over exporting or licensing. This is explained by the internalization theory. 3.1.1.2 The Product Life Cycle Theory The product life cycle theory was proposed by Raymond Vernon in the mid-1960s and was based on the observation that for most of the 20th century, a very large proportion of the world’s new products had been developed by U.S. firms and sold first in the U.S. market (e.g. automobiles, photocopiers, televisions and semiconductor chips). Vernon opined that the wealth and size of the U.S. market gave U.S. firms a strong incentive to develop new consumer products and the high labour cost also gave firms in the U.S. an incentive to develop cost-saving process innovations. The theory went further to argue that early in the life cycle of a typical new product, while demand is starting to grow rapidly in the United States, demand in other advanced countries does not make it worth while for firms in those countries to start producing the new product, but it does necessitate some export from the United State to those countries. However, over time the demand for new product starts to grow in other advanced countries. As this happens, foreign producer begin to produce at home for their own market and growing demand causes U.S. firms to setup production facilities in those advanced countries. This limits the potential for export for the United States. Finally, at maturity product becomes standardized, cost consideration start to play a greater role in the competitive process and producer in advanced countries with lower labour cost than the U.S. might now begin to export to the United States. Under intense cost pressure, the cycle by which the United State lo st its advantage to other advanced countries might be repeated once more as developing countries begin to acquire a production advantage over advanced countries (Hill, 2009). The effect of these trends is that over time the United States switches form being an exporter of the product to an importer of the product as production becomes concentrated in lower-cost foreign locations. The product life cycle seems to be an accurate explanation of international trade patterns. However, the product l Effect of Foreign Direct Investment on Nigerias Development Effect of Foreign Direct Investment on Nigerias Development Chapter One 1.1 Introduction The drying up in the early 1980’s of commercial bank lending to developing economies made most countries eased restriction on foreign direct investment (FDI) and many aggressively offered tax incentives and subsidies to attract foreign capital (Aitken  and Harrison, 1999). Private capital flow to emerging market economies reached almost $200 billion in 2000. This is almost four times larger than the peak commercial bank lending years of the 1970’s and early 80’s. FDI now accounts for over sixty percent of private capital flow (Levine and  Carkovic, 2002). However, while the explosion of FDI flow remains unmistakable, the growth effect remains unclear. Foreign direct investment (FDI) has been a topic high on the policy agenda in emerging markets. This is due to the contributions FDI make to a country’s external financing and economic growth. The extent of regulation of FDI and other form of capital flow are also issues policymakers take a stand on and economic research has devoted a large effort to these issues. The experience of small number of fast-growing East Asian newly industrialized economies (NIEs), and recently china, has strengthened the belief that attracting FDI is needed to bridging the resource gap of low-income countries and avoiding further build-up of debt while directly tackling the cause of poverty (UNCTAD, 2005). Even though the Asian crisis sounded a cautionary note to premature financial liberalization the call for more accelerated pace of opening up FDI have intensified on the assumption that this will bring not only more stable capital inflow but also greater technological know-how, higher paying jobs, entrepreneurial and workplace skills and new export opportunities (Prasad  et  al., 2003). The increased importance of FDI has brought about international relationships, trade and policies materializing into export and imports between nations. This in turn results financial rewards to host countries. Policy makers across the region of Africa have hoped that attracting FDI with the bait of high tariff protection and generous incentives packages would provide the catalyst for a â€Å"late industrialization† drive (Thandika, 2001). The debt crises in the early 80’s and policies introduced by several countries in Africa also witnessed increased FDI as necessary for economic development. The pursuit of responsible macroeconomic policies combined with an accelerating pace of liberalization, deregulation and above all privatization were expected to attract FDI to Africa (WorldBank, 1997).  However, the record of the past two decades with respect to reducing poverty and attracting FDI as a result of policy changes has been disappointing at best (Ayanwale, 2007). The importance of FDI varies across different sector in the recipient countries. However, in all major country groups, the extractive sector accounts for a significant share of inflow of FDI: for example, Australia, Canada and Norway among developed countries; Botswana, Nigeria and South Africa in Africa; Bolivia, Chile, Ecuador and Venezuela in Latin America and the Caribbean; and Kazakhstan in South-East Europe and the  CIS  (UNCTAD, 2006a). The important of this sector is due to the fact that oil and gas are crucial to the contemporary global economy and their prices are key components of economic forecasts and performance. Crude oil and refined petroleum products constitute the largest single item in international trade, whether measured by volume or value (Steven, 2005). Thus, oil and gas are strategic resources in national, regional and global economies. Despite this significant and strategic influence, empirical evidence suggests that oil and gas abundant economies are among the least growing economies (Sachs and Warner, 1997,  Gelb, 1988, Stevens, 1991, Steven, 2005). This phenomenon is often conceived within the prisms of the â€Å"resource curse† and â€Å"Dutch disease†. Both of which are manifestations of inefficient utilization of resources rather than the inevitable outcome of the availability of oil and gas resources.  The impact of FDI on economic growth of recipient country has been one of varying opinions among authors. A huge literature exists concerning different effects of foreign investment on economic development in a recipient economy. Currently FDI sustains the most dynamic development in the world economy in comparison with other forms of foreign financing (De Gregorio, 1992). Most theoretical and empirical findings (see chapter 3) imply that FDI has a strong positive growth impact on the recipient economy. Within the African context, the Nigerian economy is a unique case, not because it is a developing economy and is quite large, but because during last 15 years the country has not managed to attract significant amounts of FDI (Asiedu, 2002). Typically investment risks are so high in Nigeria that only high profits in export oriented extractive industries (e.g. fuel industry) have attracted much foreign direct investment. This sector exerts a prominent influence on the economy as a key revenue earner. While oil and gas resources have very high revenue yields due to increasing international demand the question of aggregate FDI impact on economic growth remains an open question. This paper attempts to find some answers.   Over the last decade, the Atlantic Ocean off the coast of Western and Southern Africa has become one of the most promising oil exploration areas in the world with a convergence of interest between African governments, multinational oil companies, international Financial Institutions  (Jerome  et  al., 2007). Nigeria falls among the six countries which have become key players in the world of energy stake. However, the economic record and lived experience of mineral-exporting countries has generally been disappointing. The World Bank classification of Highly Indebted Poor Countries include: twelve of the world 25 most mineral dependent states and six most oil dependent. When taken as a group, all â€Å"petroleum rich† less developed countries has witnessed erosion in their living standards and many rank bottom one-third of United Nations Human Development Index. In addition to poor growth records and entrenched poverty, they are also characterized by high level of corruption and a low prevalence of democratization  (Jerome  et  al., 2007).† 1.2 FDI Defined Various classifications have been made of foreign direct investment. For instance, FDI has been described by the Balance of Payment Manual 5th  edition (BPM5) as a category of international investment that reflects the objective of a resident in one economy (the direct Investor) obtaining a lasting interest of a resident in another economy (the direct investment enterprise). The lasting interest implies the existence of a long-term relationship between the direct investor and the direct investment enterprise and a significant degree of influence by the investor on the management of the enterprise. A direct investment relationship is established when the direct investor has acquired 10 percent or more of the ordinary shares or voting power of an enterprise abroad (IMF, 1993). This comprises not only the initial transaction establishing the FDI relationship between the direct investor and the direct investment enterprise but all subsequent capital transactions between them and among affiliated enterprises resident in different economies (Patterson  et  al., 2004). Once a firm undertakes FDI, it becomes a  multinational enterprise  (MNEs). Policymakers believe that foreign direct investment produces positive effects on host economies. Some of these benefits are in the form of  externalities  and the adoption of foreign technology which could be in the form of licensing, agreements, imitation, employee training and the introduction of new processes by the foreign firms (Alfaro  et  al., 2004). Multinational enterprises are said to diffuse technology and management know-how to domestic firms (Tang  et  al., 2008). FDI is conventionally used as a proxy to measure the extent and direction of  MNE  activities (Jones, 1996). Like any other business,  MNEs  have a major objective of maximizing profit and reducing costs. Hence,  MNEs  consider regions with higher returns on investment and enabling environment for business success. This is one of the reasons for more FDI in some places than others. Accordingly  MNE  will invest higher in regions that provide the best mix of the traditional FDI determinants (Berg, 2003). The motivation for investment by multinationals in certain countries much more than others  is discussed elaborately in chapter three 1.3. Background The involvement of  MNEs  (through FDI) in extractive industries has had a chequered history. In the early twentieth century, these industries accounted for the largest share of FDI, reflecting the international expansion of firms from the colonial powers. With a growing number of former colonies gaining independence after the Second World War, and the creation of the Organization of the Petroleum Exporting Countries (OPEC) in 1960, the dominance of these  MNEs  s declined, as did the share of extractive industries in global FDI. From the mid-1970s, in particular, the share of oil, gas and metal mining in world FDI fell steadily as other sectors grew much faster. However, as a result of rising mineral prices, the share of extractive industries in global FDI has recently increased, although it is still much lower than those of services and manufacturing. It is therefore an opportune timeto revisit the impact of FDI into theextractive industries has on economic development. Measuring the effect of FDI on economic growth occupies a substantial body of economic literature. Many theoretical and empirical studies have identified several channels through which FDI may positively or negatively affect economic growth (Akinlo, 2003,  Mello, 1997). Not many studies have reported on the effects of FDI in Africa and most existing studies have concentrated on economies with high FDI in the manufacturing industries unlike economies with high FDI inflow in the extractive sector (as the case of Nigeria). Several factors suggest that the indirect benefits of FDI maybe less in extractive sector especially oil industries. Reasons given for this are that: firstly, the extractive sector (such as oil  sub-sector) is often an enclave sector with little linkages with the other sectors. Secondly, the knowledge and technology embedded in the sector is extremely capital intensive and so transfer of knowledge and technology maybe less. Also, the capital requirement and large economies of scale may not attract new entrants into the sector as in the manufacturing sector.  Furthermore, not all sector of the economy have the same potential to absorb foreign technology or create linkages with the rest of the economy (Hirschman, 1958).  Finally, sales in this sector are foreign market oriented and require fewer input of materials and intermediate goods from local suppliers. Hence will have less forward and backward linkages  (Akinlo, 2004). The  sensitivity of project to world commodity pric e also make it been view as a volatie sector (WorldBank, 2005) Given the pattern of foreign direct investment flow to Nigeria (mostly in oil and gas sector) and the angst-ridden as regards the benefits from the extractive FDI, it is apposite to examine empirically the situation in Nigeria. This constitutes the objective of this research. An analysis of this will be done for the period between 1980 and 2006 1.4  Overview of Foreign Direct Investment 1.5  Natural Resources and Economic Development Since the 1950’s, economists have been concerned that economies dominated by natural resources would somehow be disadvantaged in the drive for economic progress. In the 1950’s and 1960’s, this concern was based upon deteriorating terms of trade between the â€Å"centre† and â€Å"periphery† (Prebisch, 1964) coupled with concern over the limited economic linkages from primary product exports to the rest of the economy (Hirschman, 1958). In the 1970’s, it was driven by the impact of the oil shocks on the oil exporting countries (Wijnbergen  and Van, 1986,  Mabro  and Monroe, 1974). In the 1980’s, the phenomenon of â€Å"Dutch Disease† (the impact of an overvalued exchange rate on the non-resource traded sector) attracted attention (Corden, 1984). Finally in the 1990’s, it was the impact of revenues from oil, gas and mineral projects on government behaviour that dominated the discussion (Stevens, 1991,  Gelb, 1988). The common thread running through these concerns is that the development of natural resources should generate revenues to translate into economic growth and development. Thus the revenues accruing to the economies should provide capital in the form of foreign exchange overcoming what was seen as a key barrier to economic progress. This could be explained both in terms of common sense (more money means a better standard of life) and development theories the requirement for a â€Å"big-push† (Murphy  et  al., 1989), capital constraints (Lewis, 1955,  Rostow, 1960) and dual-gap analysis (Shibley  and  thirlwall, 1981). However, the reality appeared to be the reverse. Countries with abundant natural resources appeared to perform less well than their more poorly endowed neighbors. Thus the term â€Å"resource curse† began to enter the literature (Vanderlinde, 1994). More recently there has been a revival of interest in the phenomenon of â€Å"resource curse†. Furthermore, this has drawn the attention of a much wider audience than previously. Growing concern among a number of non-governmental organizations (NGO’s) regarding the negative effects of oil, gas and mineral projects on developing countries has had several effects. It has forced the World Bank group to consider their role in such projects. This has culminated in the creation of â€Å"the Extractive Industry Review† based in Jakarta to consider whether the World Bank Group should, as a matter of principle, have any involvement with such projects. Disagreement within and between the World Bank and the IMF have further fuelled the debate over how such revenues should be managed.   NGO  concern has also encouraged the more responsible petroleum and mineral corporations to consider the impact of their investment in such projects on the countries concerned. However, in the literature that has focused on â€Å"resource curse†, there are references to countries that allegedly managed to avoid a â€Å"curse† and instead received a â€Å"blessing†. For example, even the report produced by  Oxfam  America (Ross, 2001) which is strongly negative towards such projects, states †¦ â€Å"There are exceptions: some states with large extractive industries – like Botswana, Chile and Malaysia – have overcome many of the obstacles †¦ and implemented sound pro-poor strategies†. There are similar references elsewhere to â€Å"success† stories – Botswana (Hope, 1998, Love, 1994), Chile (Schurman, 1996), Indonesia (Usui, 1996), Malaysia (Rasiah  and Shari, 2001), and Norway (Wright and  Czelutsa, 2002). Nigeria is Africa’s most populous country with close to 132 million inhabitants. However, approximately 55% of the population lives on less than the value of one US dollar per day. The Nigerian economy depends heavily on the oil sector, which contributes 95% of export revenues, 76% of government revenues and about a third of gross domestic product. Before the establishment of democracy in 1999, the country was governed by military generals, under whose rule Nigeria’s economic performance had taken a beating for 15 consecutive years (Datamonitor, 2007). Nigeria has a dual economy with a modern segment dependent on oil earnings, overlaid by a traditional agricultural and trading economy. At independence in 1960 agriculture accounted for well over half of GDP, and was the main source of export earnings and public revenue. The oil sector, which emerged in the 1960s and was firmly established during the 1970s, is now of overwhelming importance to the point of over-dependence. Undoubtedly, Africa and indeed Nigeria is facing an economic crises situation featured by inadequate resources for long-term development, high poverty level, low capacity utilization, high level of unemployment and other Millennium Development Goals (MDGs) increasingly becoming difficult to achieve by 2020. Foreign direct investment has assumed prominent place in her strategy as a way of boosting economic rival and growth. It is also seen by policy makers at all levels as a way of bridging the resource gap of the country and avoiding further debt build-up (UNCTAD, 2005). This has brought about several changes in policy and regulations in order to encourage foreign investor to invest in the country. Other measures include – the liberalization of the foreign investment regime to allow major foreign ownership, lifting foreign exchange controls and the privatization of Nigeria’s public enterprises. This research is aimed to take an in-depth analysis of the major private capital flow foreign direct investment to a growing economy; Nigeria. This investment trend will be narrowed down to the extractive sector and in particular the oil and gas sector with the aim of investigating how investment in this sector translate to economic growth. 1.6 Research Gap During the last decade, a number of interesting studies in the role of foreign direct investment in stimulating economic growth has appeared. Several authors have observed that the major reason for increased effort in attracting more FDI has been stemmed from the belief that FDI has several positive effects (Levine and  Carkovic, 2002, Caves, 1996). In contributing to the importance of FDI, it has also been shown that FDI is three times more efficient than domestic investment (De-Gregorio, 2003). Available evidence for developed countries seems to support the idea that productivity of domestic firms is positively related to the presence of foreign firms (Globerman, 1979). The result for developing countries are not clear, with some finding positive spillover (Blomstrom, 1986,  Kokko, 1994), and others reporting limited evidence (Aitken  et  al., 1997). Earlier studies on FDI showed that target countries receive very few benefits and in most cases negative effect on economic growth (Singer, 1950;  Prebisch, 1968;  Saltz, 1992;  Bos  et  al., 1974 cited in (Katerina  et  al., 2004). A positive  effect is only contingent on the ‘absorptive capacity’ of the host country  (Durham, 2004).  Many research have shown that FDI stimulates economic growth (Borensztein  et  al., 1998, Amy Jocelyn and  Kamal, 1999) as seen in china’s economic growth (Dees, 1998 cited in (Ayanwale, 2007) and Latin American countries (Mello, 1997) showing that inflow of capital brings about increase in investment level. FDI has also been shown to have both a positive and negative effect on economic development depending on the variables[1]  that are used along side the test equation  (UNCTAD, 1998; 1999). Its effect has also been more positively acclaimed in countries with higher institutional capabilities (Olofsdotter, 1998) and economically less advanced countries (like Philippines and Thailand) but negatively on more economically advanced countries like Japan and Taiwan (Bende-Nabende  and Ford, 1998). In essence, the impact FDI has on growth of any economy may be country an period specific and as such there is a need for country specific studies. Several studies have shown varying relationship between FDI and economic growth in Nigeria. For example,  Odozi  (1995)  study showed that Structural Adjustment Policies (SAP hereafter) of Nigeria contributed to the FDI-growth relationship. He revealed that macro-policies before SAP discouraged foreign investors.  Ogiogo  (1995) reported a negative contribution of public investment to GDP growth for the reason of distortion. However, positive linkage effect of FDI-growth relationship was shown by  Aluko  (1961). Private domestic investment was also shown by  Ariyo  (1998)  to contribute positively to raising GDP-growth rate for the period 1970-1995. Oyinlola  (1995) using  Chenery  and Stout’s two-gap model found a positive relationship between FDI and economic growth.  Ekpo  (1995) using time series data revealed that political regime, real income per  capita, inflation rate, credit rating and debt service were key factors explaining variability  in FDI into Nigeria. Using unrelated regression model, FDI was shown to be pro-consumption and pro-import hence showing a negative relationship to domestic investment (Adelegan, 2000 cited in  Ayanwale, 2007) and statistically insignificant effect was shown for FDI-growth (Akinlo, 2004). More recent findings by  Ayanwale  (2007) revealed that FDI contributes positively to Nigeria’s economic growth with the communication sector accounting for the highest potential to grow that economy. He also opined that FDI in the manufacturing sector has a negative relationship with economic growth suggesting that the business climate is not healthy enough for the manufacturing sector to thrive and contribute to positive growth. Crude oil discovery and exploration has been said to have both positive and negative effect on Nigeria. The negative side is seen in term of the environmental degradation, deprived means of livelihood and other economic and social factors experienced by surrounding communities where the oil wells are exploited while the positive side is viewed from the large proceeds from domestic sale and export of petroleum products. However, its effect on the growth of the Nigerian economy as regards returns and productivity is still questionable (Odularu, 2007). This review shows that the debate on the impact of FDI on economic growth is far from being conclusive. The role of FDI can be country specific and its relationship with growth can either be positive, negative or insignificant depending on the macroeconomic dispensation (economic,  institutional  and  technological  conditions) in the recipient country (Zhang, 2001). Even though none of these studies controlled for the fact that must of the FDI was concentrated in the extractive industry, they did not specifically investigate the relationship between oil-FDI and economic growth. This is the focus of this study. 1.7 Research Objectives and Questions Few research on FDI into Sub-Saharan Africa have shown empirical evidence of FDI and economic growth as ambiguous (Ayanwale, 2007). In theory FDI is believed to have several positive effects on the economy of host country (such as productivity gains, technology transfers, the introduction of new processes, managerial know-how and skills, employee training etc), promoting its growth and in general, a significant factor in modernizing the host country’s economy (Katerina  et  al., 2004). However, there is no clear understanding of its contribution to growth (Bora, 2002). This research was driven by the following questions: Has foreign direct investment into Nigerian oil and gas sector brought about economic development? What is the transmission mechanism through which FDI brings about growth 1.8 Methodology 1.9 Dissertation Outline The rest of the paper is organized as follows: Chapter Two: This chapter is the literature review and shall be discussed in three subsection. The first two sections shall seek to review the theories and motivation for Foreign direct investment and the third section deals with the theoretical and analytic review of literature on FDI Growth linkages. This shall seek to answer the question on the mechanism through which FDI result in economic growth. Chapter Three: This chapter discusses the case study Nigeria and reviews the contribution performance and challenges of the oil and gas sector in Nigeria. Also, the impact of this sector on economic growth is discussed. Chapter Four: The methodology and theoretical framework for the analysis is the objective of this chapter. This section discusses the research approach and data collection mode. The variables for analysis and the model for shall be derived. Chapter Five: Data Analysis of the result and findings shall be the aim of this chapter. Chapter Six: This chapter shall form the conclusion of the research and give a summary of the findings, suggestion for improving economic growth in Nigeria and recommendation for further study. Chapter Three Literature Review 3.0 Introduction Foreign direct investment is in general motivated by both â€Å"pull† and â€Å"push† factors. The push factors are external to developing countries and focuses majorly on growth and financial market conditions in industrial countries. On the other hand, the pull factors are dependent (on a lot of factors) domestic policies and characteristics of host countries. While the push factors determine the totality of available resources, the push factors determine its allocation between countries (Ajayi, 2004). The diversity of theoretical and empirical explanations for the impact and influence of FDI (and growth) is without doubt very rich. Many studies among others have emphasized conducive macroeconomic policy, increased liberalization of markets, large domestic markets, liberal trade regime, low labour cost, availability of natural resources, good infrastructure and investment in human capital (bring about an educative workforce) (Ajayi, 2003). This review therefore draws from many of these works with the particular aim of providing an understanding of the theoretical and empirical background, views and present thought on the relationship between FDI and economic growth. The discussion shall be presented in three sections. The first two sections shall discuss the theories and motivation for FDI and the third section involves theoretical and empirical review of the literature of FDI and economic growth from four perspectives: trade or export (openness), linkages and spillover effect, knowledge and technology transfer and human capital. 3.1 Theories of FDI FDI can take the form of a Greenfield investment in a new facility or an acquisition of or merger with an existing local firm. Majority of cross-border investment is in the form of merger and acquisition rather than Greenfield investments. According to estimates by United Nations, 40 to 80 percent of all FDI inflows between 1998 and 2005 were in the form of mergers and acquisition (Hill, 2009). However, FDI flows into developed nations are different from those of developing nations. For developing nations only about one- third of FDI is in the form of cross-border merger and acquisition. This may simply reflect the fact that there are fewer firms to acquire in developing nations (Hill, 2009). For the purpose of this research, I have concentrated on two theories of FDI which are relevant to the study. The first perspective explains why firms in the same industry often undertake FDI at the same time and why certain locations are favoured over others (i.e. the observed pattern of FDI). The second is known as the eclectic paradigm. This perspective is eclectic because it combines the best aspects of other theories into a single explanation. In proceeding with the discussion, we define some terms. When goods are produced at home and then shipped to the receiving country for sale, it is known as exporting. The process of granting a foreign entity (the licensee) rights to produce and sell the firm’s product in return for a royalty fee on every unit sold is known as Licensing. Foreign direct investment has been view as an expensive and risky venture compared to exporting and licensing. This is because firms bear the cost of establishing production facilities in a foreign country or acquiring a foreign enterprise and the risk of doing business in countries with different culture. In exporting, firms need not bear cost associated with FDI and risk can be reduced by the use of local sales agents. Similarly, under licensing, the licensee bears the cost and risks. However, it is worth noting in summary that firms will choose FDI over exporting as an entry strategy when transportation costs or trade barriers make exporting unattractive. Furthermore, firms will favor FDI over licensing (or franchising) when it wishes to maintain control of technological know-how or over its operations and business strategy or when firm’s capabilities are simply not amenable to licensing (Hill, 2009). 3.1.1 The Pattern of FDI 3.1.1.1 Strategic Behaviour The idea that FDI flow reflects strategic rivalry between firms in the global marketplace is the basis for one of the theories of FDI. In studying the relationship between FDI and rivalry in oligopolistic industries F. T. Knickerbocker proposed a variation to this argument. An oligopoly is an industry made up of a small number of large players (for example, an industry in which four firms control 80 percent of a domestic market). One key features of such market is the interdependence of major players: the action of one firm have immediate impact on the major competitors, forcing a response in kind. This interdependence leads to imitative behaviour; rivals are usually quick to imitate opponents in and oligopoly – â€Å"the bandwagon effect†. Imitative behaviour can take many forms in an oligopoly. Some good examples are price war and capacity increase. Rivals imitate lest they be left at a disadvantage in the future. F. T. Knickerbocker argued that the same kind of imitative behaviour characterizes FDI. Although Knickerbockers’ theory and its extensions can help to explain imitative FDI behaviour by firms in oligopolistic industry, it does not explain the choice and efficiency of FDI over exporting or licensing. This is explained by the internalization theory. 3.1.1.2 The Product Life Cycle Theory The product life cycle theory was proposed by Raymond Vernon in the mid-1960s and was based on the observation that for most of the 20th century, a very large proportion of the world’s new products had been developed by U.S. firms and sold first in the U.S. market (e.g. automobiles, photocopiers, televisions and semiconductor chips). Vernon opined that the wealth and size of the U.S. market gave U.S. firms a strong incentive to develop new consumer products and the high labour cost also gave firms in the U.S. an incentive to develop cost-saving process innovations. The theory went further to argue that early in the life cycle of a typical new product, while demand is starting to grow rapidly in the United States, demand in other advanced countries does not make it worth while for firms in those countries to start producing the new product, but it does necessitate some export from the United State to those countries. However, over time the demand for new product starts to grow in other advanced countries. As this happens, foreign producer begin to produce at home for their own market and growing demand causes U.S. firms to setup production facilities in those advanced countries. This limits the potential for export for the United States. Finally, at maturity product becomes standardized, cost consideration start to play a greater role in the competitive process and producer in advanced countries with lower labour cost than the U.S. might now begin to export to the United States. Under intense cost pressure, the cycle by which the United State lo st its advantage to other advanced countries might be repeated once more as developing countries begin to acquire a production advantage over advanced countries (Hill, 2009). The effect of these trends is that over time the United States switches form being an exporter of the product to an importer of the product as production becomes concentrated in lower-cost foreign locations. The product life cycle seems to be an accurate explanation of international trade patterns. However, the product l