Exchange Rate and Real Investment of Quoted Consumer Goods Manufacturing Firms in Nigeria

This thesis examined the correlation between exchange rate fluctuations and the actual investment choices of publicly traded consumer products manufacturing companies in Nigeria. We got cross-sectional panel data and used Econometrics View statistical software to analyze it using linear regression techniques. The dependent variable was real investment, and the independent variables were foreign exchange reserves, foreign exchange supply, and foreign exchange utilization at time t. Panel data approaches were utilized, and estimate was conducted employing the fixed effects model at a 5% level of significance. We used the Hausman test to help us choose the best estimation method by estimating pooled ordinary least squares, random effects, and fixed effects models. We also used descriptive statistics and panel unit root tests to look at the data's qualities. The results showed that changes in foreign currency variables were responsible for 51.8% of the changes in real investment among the enterprises that were studied. The calculated coefficients further demonstrated a negative and statistically significant association between foreign currency reserves and real investment, while foreign exchange use and foreign exchange supply exhibited positive and significant effects on real investment. The research finds that managing exchange rates has a small effect on the real investment choices of publicly traded consumer goods companies in Nigeria. It is therefore suggested that policies designed to stabilize and enhance exchange rate management be adopted to positively impact real and portfolio investment decisions. Additionally, monetary authorities should enact effective strategies to mitigate naira depreciation to improve stock market performance and encourage investment among listed companies.