Foreign Direct Investment: Is Natural Resources the Rejoin? Evidence from Ghana, Nigeria, and Togo: Fixed Effect Approach

Several scholarships have endeavored to guesstimate the sway of natural resources on foreign direct investment inflows around the globe, but very few have engrossed on relative studies on Ghana, Nigeria, and Togo. The current paper departed from prior lessons and employed a thoughtful charter that clearly investigate the question of whether natural resource endowments is a more relevant factor to explain FDI’s attraction to the countries under study. Two models fixed and random effects were established using pooled ordinary least squares (POLS) model, to estimate the coefficients. We applied a panel and time series data from 1982-2017. Preliminary results were obtained using both the random effect and fixed effect model. After conducting several tests such as Hausman Test and Breusch and Pagan Lagrangian Multiplier Test, the fixed effects model was considered the most appropriate model for the study. The results of the study yielded by both techniques registered natural resources to be significant as a propelled feature for FDI inflows. Additional issues such as GDP per capita, trade openness, political stability, and economic liberalization were also found to be significant in FDI determination.