The Impact of Foreign Direct Investment and Trade Openness on The Ghanaian Economy

Result code in IS VaVaI

<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F62156489%3A43110%2F24%3A43925086" target="_blank" >RIV/62156489:43110/24:43925086 - isvavai.cz</a>

Result on the web

<a href="https://doi.org/10.17059/ekon.reg.2024-1-22" target="_blank" >https://doi.org/10.17059/ekon.reg.2024-1-22</a>

DOI - Digital Object Identifier

<a href="http://dx.doi.org/10.17059/ekon.reg.2024-1-22" target="_blank" >10.17059/ekon.reg.2024-1-22</a>

Result language

angličtina

Original language name

The Impact of Foreign Direct Investment and Trade Openness on The Ghanaian Economy

Original language description

Foreign direct investment (FDI) and trade openness serve as macroeconomic indicators that support economic growth. Numerous studies conducted in recent years have empirically demonstrated the significance of FDI and trade liberalisation. Historical data illustrates that Ghana operates as a net importer, posing several challenges for domestic firms due to the comparative advantage of multinational enterprises and economies of scale. However, the full extent of the theories surrounding FDI and trade openness remains incompletely understood across all economies. This study aims to uncover the impact of FDI and foreign trade on economic growth in Ghana. The study utilised time series data sourced from the World Bank spanning from 1985 to 2021, on an annual frequency. The econometric methods employed include a unit root test (ADF), Engle-Granger cointegration test, and multiple regression analysis (Ordinary Least Squares). The ADF unit root test indicated that the variables were non-stationary and integrated at first-order difference. The Engle-Granger cointegration test revealed that the variables are cointegrated. Regression analysis results demonstrated that both FDI and trade openness exert a positive influence on economic enhancement in Ghana, with GDP serving as a proxy for growth. Furthermore, the analysis showed that FDI has a positive impact on GDP per capita, whereas trade openness negatively affects it, utilising GDP per capita as the explained variable. Based on these findings, the study recommends that policymakers implement sound FDI and trade policies to foster economic growth in the country.

Czech name

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Czech description

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Type

J_imp - Article in a specialist periodical, which is included in the Web of Science database

CEP classification

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OECD FORD branch

50202 - Applied Economics, Econometrics

Project

—

Continuities

I - Institucionalni podpora na dlouhodoby koncepcni rozvoj vyzkumne organizace

Publication year

2024

Confidentiality

S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Name of the periodical

Ekonomika regiona

ISSN

2072-6414

e-ISSN

2411-1406

Volume of the periodical

20

Issue of the periodical within the volume

1

Country of publishing house

RU - RUSSIAN FEDERATION

Number of pages

15

Pages from-to

321-335

UT code for WoS article

001195867100013

EID of the result in the Scopus database

2-s2.0-85190159800