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It must be pointed out, however, that the motives behind these international capital flows are still substantially different than those related to the inflows of FDI to developing countries, in spite of the changes that have taken place over the last decades.For example, the search for agricultural or mineral resources is much less important today than it was at the beginning of the twentieth century.The purpose of this paper is to examine the determinants of FDI in Ghana between the period of 19.
Finally, their obligations to credit nations compromise the ability of these governments to act independently in the international political economy.
A number of domestic factors are important in attracting FDI to an economy.
In summary Foreign Direct Investment (FDI) in Ghana is much concentrated in the mining and oil and gas sector at the expense of the fundamental drivers of Ghana’s economy, therefore FDI becomes less impactful on Ghana’s economic growth.
Ghana’s attraction of foreign direct investment hinge on major factors mentioned earlier above.
For example, from 1980–1989 to 1990–1998, FDI to Sub-Saharan Africa (SSA) grew by 59 percent.
This compares disproportionately with high increase of 5,200 percent for Europe and Central Asia, 942 percent for East Asia and Pacific, 740 percent for South Asia, 455 percent for Latin America and Caribbean and 672 percent for all developing countries.
The study found that both the long-run and short-run results found statistically significant negative effects of inflation rate, exchange rate and interest rate on FDI in Ghana whiles gross domestic product, electricity production and TU had a positive effect on FDI. https://doi.org/10.1108/JABES-08-2018-0057 Download as . The full terms of this licence may be seen at Foreign direct investment (FDI) is a vital ingredient in achieving sustained growth of any nation, including Ghana.
This study has given more effective ways of attracting more FDI into countries which in effect achieve higher GDP and also higher standard of living through mechanisms and in the end creating more social protection programs for the people. FDI serves as a critical factor that helps to propel the economic growth of every nation (Coy and Comican, 2014).
On the other hand, the current movement of these flows is extremely complex, and is subject to a wide variety of factors related to the competitive environment in which the firms operate, to their specific characteristics and to economic factors in the home and host countries.
According to World Bank (2001), the past decade has witnessed a dramatic increase in FDI to developing countries; with FDI increasing from bn (24 percent of the total foreign investment) in 1990 to 8 bn (61 percent of the total foreign investment) in 2000.