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Determinants of Foreign Direct Investment in Ghana: A Sectoral Analysis

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  • Yakubu, Ibrahim Nandom
  • Mikhail, Abdul Azeez

Abstract

This study assesses the determinants of foreign direct investment (FDI) at sector level in Ghana taking into consideration the agriculture sector, services sector, and manufacturing sector. Using sector level data spanning 2000-2014, findings from the Ordinary Least Squares (OLS) regression analysis show that market size (measured by GDP) and labour cost have a significant impact on the inflows of agriculture sector FDI. The results also confirm trade openness and exchange rate to significantly influence services sector FDI. Unexpectedly, none of the variables are found to have significant effect on manufacturing sector FDI. The study recommends that the government should implement strategies that will enhance the growth of Ghana’s GDP, and deregulate the economy to allow more foreign investors into the country.

Suggested Citation

  • Yakubu, Ibrahim Nandom & Mikhail, Abdul Azeez, 2019. "Determinants of Foreign Direct Investment in Ghana: A Sectoral Analysis," MPRA Paper 95121, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:95121
    as

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    References listed on IDEAS

    as
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    Cited by:

    1. Ronald Ebenezer Essel, 2023. "Foreign direct investment, technological spillover, and total factor productivity growth in Ghana," SN Business & Economics, Springer, vol. 3(8), pages 1-34, August.

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    More about this item

    Keywords

    Determinants; Foreign Direct Investment; Ghana; OLS; Sector;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade
    • F18 - International Economics - - Trade - - - Trade and Environment
    • F44 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Business Cycles

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