Browsing by Author "Sevlo, Eustace Sakyi"

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    Determinants of FDI in Ghana: a cointegration analysis
    (KNUST, 2016-06) Sevlo, Eustace Sakyi
    ABSTRACT The inflow of foreign direct investment is hailed in most developing countries since it bridges gap between low domestic savings due to low incomes and hence low domestic investment. This research studied the Determinants of FDI in Ghana using Cointegration and VECM analysis. Using data from 1980 to 2014. Real exchange rate and its volatility, inflation, infrastructure development, trade openness, return on investment international interest rate and democracy (political stability) were the main variables of interest. The ARCH/GARCH models was used to model the volatility of real exchange rate. The volatility of real exchange in Ghana has been persistent over the years which is mostly takes the form of the falling cedi. The study found that there is positive long run causality running form Real Exchange Rate, Real, Infrastructure and Return on Investment to FDI inflows in Ghana. Whiles that of exchange rate volatility, inflation and trade openness has a negative long run relationship. In the long run these variables today could determine FDI in the next generation. It was found also that about 80% of irregularities in foreign direct investment inflow is corrected within the same time period. The study also established that there exist short run causality running from Real Exchange Rate, Trade Openness and Democracy to foreign direct investment in Ghana. The other variable were established to have a weak statistical significance