Foreign Direct Investment Spillovers and the Ghanaian Local Financial Environment

Turkson, FE, Gyeke-Dako, A and Amissah, EB ORCID: 0000-0002-2665-2264, 2015. Foreign Direct Investment Spillovers and the Ghanaian Local Financial Environment. Modern Economy, 6 (10), pp. 1078-1089. ISSN 2152-7245

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Abstract

Using the bound cointegration test, we examine how Foreign Direct Investment (FDI) influences Ghana’s growth through the financial environment. We use data from different sources including the World Development Indicators (WDI) of the World Bank, covering the period 1977-2010 to address this. Our key results are interesting. Specifically, our results show that, both in the short run and in the long run, FDI will have a better influence on growth in a sound financial environment. However, whiles the capital market is important to propel FDI’s influence on Ghana’s growth in the long-run; in the short run, developing the banking sector alone is not sufficient to achieve growth. Banking sector development needs FDI to influence growth. Our results justify enormous efforts made by Ghana to attract FDI and further suggest that the continuation of this policy will be beneficial to the economy given the relative progress made with regards to banking system and capital market development over the past two decades.

Item Type: Journal article
Publication Title: Modern Economy
Creators: Turkson, F.E., Gyeke-Dako, A. and Amissah, E.B.
Publisher: Scientific Research Publishing, Inc.
Date: 27 October 2015
Volume: 6
Number: 10
ISSN: 2152-7245
Identifiers:
NumberType
10.4236/me.2015.610104DOI
Divisions: Schools > Nottingham Business School
Depositing User: Jonathan Gallacher
Date Added: 06 Jan 2017 10:50
Last Modified: 09 Jun 2017 14:10
URI: http://irep.ntu.ac.uk/id/eprint/29583

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