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Currency Union And Foreign Direct Investment Inflow: Evidence From Economic Community Of West African States (Ecowas)

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  • Anokye M. Adam

    (University of Cape Coast, School of Business, Cape Coast, Ghana Open University Malaysia, Accra Institute of Technology Campus, Accra, Ghana)

Abstract

This study investigates the effect of currency union membership on foreign direct investment inflow to ECOWAS subregion. The employed panel dynamic ordinary least square (DOLS) to estimate a panel data of fifteen ECOWAS countries from 1995 to 2010 with the framework of gravity model. The result indicates a positive effect of currency union on FDI inflow to ECOWAS which shows that the presence of currency union is likely to increase FDI by 46%. The control variables, political constraint, current account and trade openness is significant in explaining FDI inflow to ECOWAS. The implications of the findings are that currency union positively influences the flow of FDI into ECOWAS region and this requires stable political environment, financial and trade openness. It goes to suggest that adoption of common currency should go with these factors to maximise the benefit of currency union membership in the region

Suggested Citation

  • Anokye M. Adam, 2013. "Currency Union And Foreign Direct Investment Inflow: Evidence From Economic Community Of West African States (Ecowas)," Far East Journal of Psychology and Business, Far East Research Centre, vol. 11(5), pages 73-81, May.
    • Handle: RePEc:fej:articl:v:11b:y:2013:i:5:p:73-81
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    References listed on IDEAS

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    Cited by:

    1. Cuneyt KILIC & Y lmaz BAYAR & Feyza ARICA, 2014. "Effects of Currency Unions on Foreign Direct Investment Inflows: The European Economic and Monetary Union Case," International Journal of Economics and Financial Issues, Econjournals, vol. 4(1), pages 8-15.

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    More about this item

    Keywords

    Currency Union; Foreign Direct Investment; FDI; ECOWAS; DOLS;
    All these keywords.

    JEL classification:

    • M1 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration

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