Examining the interrelationship between exchange rate, foreign direct investment and economic growth among selected african countries.

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Date
2023
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KNUST
Abstract
The overall objective of the study is to examine the interaction relationship between exchange rate, foreign direct investment and economic growth. To achieve the objective of the study, the quantitative research design was adopted in addition to the explanatory research method. The study used a sample of 20 African countries across a period of 22 years from 2000 to 2021. The study further used the random effect regression analysis to estimate the relationship between the variables in the study. Evidence from this research indicates that FDI inflows contribute positively and significantly to economic expansion. The research indicated that the performance of the exchange rate has a favorable and substantial influence on the expansion of the African economy. The study revealed that the exchange rate considerably and favorably moderates the connection between FDI and GDP growth in Africa. Based on the findings, the study among other factors recommended that governments should work to create an environment that is conducive to investment, which can help to attract FDI to the country. This could include measures such as simplifying business registration processes, reducing red tape, and improving infrastructure. The study also recommended that policy makers work to promote a stable exchange rate. A stable exchange rate can help to attract foreign direct investment (FDI) to the country, as it can make the country more attractive to foreign investors. Finally, it recommended for future studies to consider other robust estimation strategies such as the GMM estimations in order to ascertain if the findings of this study could be confirmed or rejected by their findings.
Description
A thesis submitted to the department of accounting and finance in partial fulfilment of the requirements for the degree of mba. Finance.
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