Foreign Direct Investment, Trade Openness and Economic Growth in Ghana: An Empirical Investigation

Sakyi, Daniel; Commodore, Richmond; Opoku, Eric Evans Osei

doi:10.1080/15228916.2015.1061283

Cited by 88 publications

(78 citation statements)

References 57 publications

(54 reference statements)

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“…Though many studies have examined the effect of capital flows in Africa and particularly Ghana, none has empirically examined the differential effects of capital flows in Ghana. Museru, Toerien, & Gossel (2014) and Adams and Atsu (2014), for example, examine the impact of aid on growth, while Sakyi et al (2015), Oteng-Abeyie and Frimpong (2006) and Adams (2009) look at the effect of FDI on growth. It is not surprising therefore that attention has turned to the relative importance of capital inflows and their effectiveness in promoting growth and development on the continent (Driffield & Jones, 2013).…”

Section: Introductionmentioning

confidence: 98%

Capital Flows and Economic Growth in Ghana

Klobodu

Adams

2016

Journal of African Business

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The study examines the differential effects of capital flows on economic growth in Ghana over the period 1970-2014 using autoregressive distributed lag (ARDL). Breakpoint unit root tests are employed to cater for structural change and breaks in time series. Afterwards, these break dates are fed into the ADRL model as dummy variables to allow for the computation of a more robust cointegrating vector. The findings indicate that in both the short and long run capital flows (i.e. FDI, aid, and external debt) have negative effects on economic growth. However, remittances exhibit positive insignificant elasticity in all the regressions. Further, the empirical results show that while the impact of trade, gross capital formation and population growth on growth are mixed, that of inflation is negative. The results of the study are consistent with the idea that the impact of capital flows in Africa has been exaggerated.

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Section: Introductionmentioning

confidence: 98%

Capital Flows and Economic Growth in Ghana

Klobodu

Adams

2016

Journal of African Business

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“…Wang (2003) presents evidence indicating that both Foreign Direct Investment (FDI) and trade affect positively economic growth, but trade promotes growth in all country groups while FDI has positive effects only in those countries with moderate development. Similarly, Sakyi et al (2015a) state that the interaction of FDI and exports has been a key factor to foster economic growth in Ghana during the 1970-2011 period, while Pegkas (2015) shows that FDI is a key factor to impulse economic growth in the Eurozone countries. In the same sense, the evidence presented in Brueckner and Lederman (2016) indicates that trade openness has a significant and positive effect on economic growth in Sub-Saharan Africa, while Bakari and Krit (2017), in a study for Mauritania during the 1960-2015 period, show that exports has a positive effect on growth, but imports affects negatively the economic performance.…”

Section: Introductionmentioning

confidence: 99%

Exports, Terms of Trade and Economic Growth: Evidence from Countries with Different Level of Openness

Dabús¹,

Delbianco²

2019

J. Rev. Global Econ.

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This paper explores the effects of the ratio exports/GDP and the terms of trade on growth among countries with different level of development and openness. These effects vary among subgroups of countries with different openness and per development level. Nonetheless, in general the evidence seems to support the hypothesis stated in this research. In less developed or better endowed for export countries one or both of the explanatory variables mentioned above encourage for economic growth. Specifically, in advanced economies only the ratio exports/GDP is growth promoting when these are open, and have high per capita but small global GDP and/or relative advantages to be growth export-led. In turn, exports or and the terms of trade trends to promote growth in lower middle income countries. Unfortunately, the surprising results came from the poorest countries. They do not are benefited from a more favourable foreign environment. On the contrary, exports are not significant while an improvement in the terms of trade diminishes their growth.

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“…Some studies have also expressed concern about the effect of such capital inflows and external borrowing on developing countries because of their weak management and institutional capacities to ensure effective use of such flows (Heller, ; Rajan & Subramanian, ; Moss, Pettersson, & Van de Walle, ; Precious & Asrat, ). The questions regarding the sustainability and negative effects of international capital flows and the implication for growth have also been raised (Sakyi, Commodore, & Opoku, ; Baharumshah, Slesman, & Devadason, ).…”

Section: Introductionmentioning

confidence: 99%

Understanding the Determinants of Saving in Ghana: Does Financial Literacy Matter?

Baidoo

Boateng

Amponsah

2018

J of Intl Development

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Domestic savings remain low in Ghana despite several attempts to improve this situation. Whereas existing studies on private savings have identified several determinants, the role of financial literacy in saving decisions has not been explored. In this paper, we build on existing studies and provide evidence supporting our hypothesis that financial literacy is key to promoting domestic saving. The study relies mainly on primary data, and the binary probit regression model is employed as the estimation technique. Our results show that improving financial literacy among Ghanaians should be incorporated into the broad policy package aimed at increasing domestic saving which is a prerequisite for investment and subsequently sustainable economic growth. Copyright © 2018 John Wiley & Sons, Ltd.

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Foreign Direct Investment, Trade Openness and Economic Growth in Ghana: An Empirical Investigation

Cited by 88 publications

References 57 publications

Capital Flows and Economic Growth in Ghana

Capital Flows and Economic Growth in Ghana

Exports, Terms of Trade and Economic Growth: Evidence from Countries with Different Level of Openness

Understanding the Determinants of Saving in Ghana: Does Financial Literacy Matter?

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