BETWEEN FOREIGN DIRECT INVESTMENT (FDI) AND OUTSOURCING: WHICH POLICY STRATEGY WILL ENHANCE THE COMPETITIVENESS OF THE NIGERIAN RICE SECTOR?

One critical aspect of globalization that can benefit developing countries is the encouragement of foreign sourcing. Outsourcing and foreign direct investment (FDI) will bring about strategic linkages with local buyers, suppliers and other institutions. Against this background, this study makes a ca...

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Bibliographic Details
Published in:International journal of food and agricultural economics 2015-04, Vol.3 (2), p.91-105
Main Authors: Animashaun, Jubril Olayinka, Ojehomon, Vivian Ebihomon Titilayo, Muhammad-Lawal, Abdulazeez, Amolegbe, Khadijah Busola
Format: Article
Language:English
Subjects:
Absorptive capacity
Agricultural and Food Policy
Competition
Developing countries
Foreign investment
Funding
Globalization
Host country
Human capital
International Relations/Trade
LDCs
Marketing
Outsourcing
Political Economy
Productivity Analysis
Rice
Self sufficiency
Studies
Technology transfer
Trade liberalization
Trade policy
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Summary:One critical aspect of globalization that can benefit developing countries is the encouragement of foreign sourcing. Outsourcing and foreign direct investment (FDI) will bring about strategic linkages with local buyers, suppliers and other institutions. Against this background, this study makes a case for foreign sourcing in the rice sector vis-a-vis the absorptive capacity of the sector over a projected 10-year (2013-2023) period in Nigeria. It subsequently modelled the welfare implication of FDI and outsourcing on the host nation. This study emphasized the need for increased investment that will enhance technological spillovers to the local producers. The model suggests that at a low level of human capital and high absorptive capacity, it benefits the country to first encourage FDI and subsequently encourage more of outsourcing as it is a better welfare enhancing strategy. The study concludes by recommending the setting up of attractive investment environments and the formulation of sound domestic and macroeconomic policy that would make the country more attractive for investors.
ISSN:2147-8988
2149-3766
2149-3766
DOI:10.22004/ag.econ.206309