Journal of Finance and Economics

Journal of Finance and Economics

ISSN: 2291-4951 (Print)    ISSN: 2291-496X (Online)

Volume 4 (2016), No. 2, Pages 23-45

DOI: 10.12735/jfe.v4n2p23

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Evidence on the Co-Integration of the Determinants of Foreign Direct Investment in Ghana

George Owusu-Antwi1  James Antwi2  Juanita Dorothy Ashong3  Nana T. Owusu-Peprah4 

1College of Business, Central State University, Wilberforce, OH, USA
2College of Business and Economics, University of Delaware, Newark, DE, USA
3Ghana Institute of Management and Public Administration, Accra, Ghana
4EcoBank Limited, Accra, Ghana


To Cite this Article     Article Views: 1064     Downloads: 562  Since deposited on 2016-07-21


The mining industry has traditionally been a major recipient of foreign direct investment in sub-Saharan Africa and has commonly been an important foreign exchange earner for the region. The purpose of this study is to empirically determine the factors that have influence FDI flows in Ghana from 1983 to 2012, using co-integration analysis. The major empirical and methodological contribution of this study is the use of co-integration approach to determine FDI inflows to the mining sector in Ghana. The results of the study registered exchange rate, inflation and openness of trade to be significant in the long run. Natural resources were designated to have a negative long-run relationship between FDI inflows. GDP was used as a proxy for market size and economic liberalization were also registered to be insignificant. In the short run all the variables were found to be insignificant except natural resources which contributed negatively and significant to the mining sector. One economic task facing Ghana, therefore, is how to articulate the necessary policies that can attract the right kind of FDI in the mining sector.

JEL Classifications: F3, F21

Keywords: foreign direct investment; natural resources; co-integration; unit root; augmented dickey-fuller; mining

To Cite this Article: Owusu-Antwi, G., Antwi, J., Ashong, J. D., & Owusu-Peprah, N. T. (2016). Evidence on the cointegration of the determinants of foreign direct investment in Ghana. Journal of Finance and Economics, 4(2), 23-45.

Copyright © G. Owusu-Antwi et al.

Creative Commons License
This article is published under license to Science and Education Centre of North America. This is an Open Access article distributed under the terms of the Creative Commons Attribution 4.0 International License.

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Evidence on the Co-Integration of the Determinants of Foreign Direct Investment in Ghana