International Organization Research
Volume. 5, Number 3; Drive 2012
The result of Investment Promotion in Foreign Direct Investment Inflow into Ghana Justice G. Djokoto Division of Agribusiness, Central Organization School, Central University College or university P. To. Box DS 2310, Dansoman, Accra, Bekwai, ghana Tel: 233-28-503-7399 Received: January 10, 2012 doi: 12. 5539/ibr. v5n3p46 Abstract The paper investigated the effect of investment promotion (IP) upon foreign immediate investment circulation (FDI) in Ghana. Cointegration among the parameters was established employing auto regressive distributed lag (ARDL) versions in the presence of a mix of I (0) and I (1) variables. The control factors, inflation and trade visibility were statistically significant in the short run. Even though inflation applied a negative impact on FDI inflow; trade visibility positively activated FDI inflow. GDP every capita and exchange charge did not statistically significantly affect FDI inflow in the short run. In respect of the real key variable GIPC, in the short run, there was a positive but statistically insignificant effect on FDI inflow. The estimated long-run ARDL model showed that macroeconomic variables just like inflation, GROSS DOMESTIC PRODUCT and trade openness identified FDI influx into Bekwai, ghana. Notwithstanding good relationship between establishment of IP organization (GIPC) and FDI influx, this relationship was statistically insignificant. Better efforts for macroeconomic management specifically, campaign of exterior trade, elevating GDP and reducing inflation holds even more promise to attracting FDI into Bekwai, ghana. GIPC needs to be maintained to realise a supportive part when the foreign investors get to Ghana. Keywords: Foreign direct investment, Expenditure promotion, Operate openness, Pumpiing, Gross home-based product 1 ) Introduction E-mail: [email protected] com Published: 03 1, 2012
Accepted: Feb 15, 2012
1 . 1 Background
In recent years debate within the role of external reference inflows, including foreign direct investment (FDI) and their potential contribution to accelerating progress and progress towards achieving development desired goals in The african continent has considered centre stage (UNECA, 2006). In line with the general trend of private capital runs in expanding regions, FDI to Africa has been going up in recent years especially since the nineties (Ndikumana, the year 2003; UNECA, 2006). FDI which in turn refers to an investment made to get lasting desire for an business operating outside of the economy of the investor (UNCTAD, 2002) can be noted pertaining to the following rewards (de Mello Jr., 1997); Firstly, back to the inside FDI may stimulate regional investment by simply increasing home-based investment through links in the production chain when ever foreign organizations buy locally made advices or the moment foreign firms supply intermediate inputs to local organizations. Secondly, the foreign capital inflow augments the supply of money for expenditure thus promoting capital formation in the number country. Finally, inward FDI can boost the host country's export capability causing the developing region to increase its foreign exchange profits. Fourthly, FDI is also associated with new work opportunities and enhancement of technology transfer, and boosts overall monetary growth in host countries. A portfolio of actions through which government authorities aim to entice foreign direct investment (FDI) inflows makes up investment promo (Wells & Wint, 2000). These profile of activities include: advertising, investment seminars and missions, participation in trade shows and exhibitions, distribution of books, one-to-one immediate marketing efforts, facilitating trips of potential investors, matching prospective traders with local partners, help with obtaining lets and approvals, preparing job proposals, conducting feasibility studies and maintenance investors whose projects have become operational. Some Expense Promotion Firms (IPAs) do engage in granting incentives to foreign shareholders,...