Drivers of foreign direct investment: new evidence from West African regions
Purpose – This paper aims to empirically investigate the factors attracting foreign direct investment (FDI) inflows into emerging economies. Design/methodology/approach – This study uses secondary data from the World Bank and the Global State of Democracy Indices of 16 West African countries (WACs)...
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| Format: | Article |
| Language: | English |
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Emerald Publishing
2025-01-01
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| Series: | Journal of Business and Socio-Economic Development |
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| Online Access: | https://www.emerald.com/insight/content/doi/10.1108/JBSED-12-2021-0173/full/pdf |
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| author | Emmanuel Korsah Richmell Baaba Amanamah Prince Gyimah |
| author_facet | Emmanuel Korsah Richmell Baaba Amanamah Prince Gyimah |
| author_sort | Emmanuel Korsah |
| collection | DOAJ |
| description | Purpose – This paper aims to empirically investigate the factors attracting foreign direct investment (FDI) inflows into emerging economies. Design/methodology/approach – This study uses secondary data from the World Bank and the Global State of Democracy Indices of 16 West African countries (WACs) over the period from 1989 to 2018. Fixed- and random-effects econometric regression models are used to assess the nexus between 12 macroeconomic indicators (including political risk and cultural factors) and FDI inflows into WACs. Findings – The critical drivers of FDI inflows into WACs are the richness of natural resources, market size or gross domestic product (GDP), imports and exports of goods and services, trade openness and the currency's strength as measured by the exchange rate. The result also reveals that French-speaking countries attract more FDI than other English-speaking countries. The previously cited determinants of FDI, such as infrastructural development, inflation, tax and political stability, are insignificant in determining FDI inflows into WACs. Originality/value – This study uncovers the critical drivers explaining the FDI inflows into WACs, where FDI accounts for 39% of external finance. The study's contribution is that Francophone WACs attract more FDI than Anglophone WACs. The most important drivers of FDI are abundant natural resources, GDP, imports, exports, trade openness and exchange rate. |
| format | Article |
| id | doaj-art-18b6736d64c64fa2bc38f79e0d8095ee |
| institution | Kabale University |
| issn | 2635-1374 2635-1692 |
| language | English |
| publishDate | 2025-01-01 |
| publisher | Emerald Publishing |
| record_format | Article |
| series | Journal of Business and Socio-Economic Development |
| spelling | doaj-art-18b6736d64c64fa2bc38f79e0d8095ee2025-01-15T07:01:31ZengEmerald PublishingJournal of Business and Socio-Economic Development2635-13742635-16922025-01-015131910.1108/JBSED-12-2021-0173Drivers of foreign direct investment: new evidence from West African regionsEmmanuel Korsah0Richmell Baaba Amanamah1Prince Gyimah2Department of Accounting Studies Education, Akenten Appiah-Menka University of Skills Training and Entrepreneurial Development, Kumasi, GhanaDepartment of Accounting Studies Education, Akenten Appiah-Menka University of Skills Training and Entrepreneurial Development, Kumasi, GhanaDepartment of Accounting Studies Education, Akenten Appiah-Menka University of Skills Training and Entrepreneurial Development, Kumasi, GhanaPurpose – This paper aims to empirically investigate the factors attracting foreign direct investment (FDI) inflows into emerging economies. Design/methodology/approach – This study uses secondary data from the World Bank and the Global State of Democracy Indices of 16 West African countries (WACs) over the period from 1989 to 2018. Fixed- and random-effects econometric regression models are used to assess the nexus between 12 macroeconomic indicators (including political risk and cultural factors) and FDI inflows into WACs. Findings – The critical drivers of FDI inflows into WACs are the richness of natural resources, market size or gross domestic product (GDP), imports and exports of goods and services, trade openness and the currency's strength as measured by the exchange rate. The result also reveals that French-speaking countries attract more FDI than other English-speaking countries. The previously cited determinants of FDI, such as infrastructural development, inflation, tax and political stability, are insignificant in determining FDI inflows into WACs. Originality/value – This study uncovers the critical drivers explaining the FDI inflows into WACs, where FDI accounts for 39% of external finance. The study's contribution is that Francophone WACs attract more FDI than Anglophone WACs. The most important drivers of FDI are abundant natural resources, GDP, imports, exports, trade openness and exchange rate.https://www.emerald.com/insight/content/doi/10.1108/JBSED-12-2021-0173/full/pdfForeign direct investment (FDI)West AfricaSub-Saharan AfricaFixed and random effects |
| spellingShingle | Emmanuel Korsah Richmell Baaba Amanamah Prince Gyimah Drivers of foreign direct investment: new evidence from West African regions Journal of Business and Socio-Economic Development Foreign direct investment (FDI) West Africa Sub-Saharan Africa Fixed and random effects |
| title | Drivers of foreign direct investment: new evidence from West African regions |
| title_full | Drivers of foreign direct investment: new evidence from West African regions |
| title_fullStr | Drivers of foreign direct investment: new evidence from West African regions |
| title_full_unstemmed | Drivers of foreign direct investment: new evidence from West African regions |
| title_short | Drivers of foreign direct investment: new evidence from West African regions |
| title_sort | drivers of foreign direct investment new evidence from west african regions |
| topic | Foreign direct investment (FDI) West Africa Sub-Saharan Africa Fixed and random effects |
| url | https://www.emerald.com/insight/content/doi/10.1108/JBSED-12-2021-0173/full/pdf |
| work_keys_str_mv | AT emmanuelkorsah driversofforeigndirectinvestmentnewevidencefromwestafricanregions AT richmellbaabaamanamah driversofforeigndirectinvestmentnewevidencefromwestafricanregions AT princegyimah driversofforeigndirectinvestmentnewevidencefromwestafricanregions |