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Agricultural sector foreign direct investment and economic growth in Ghana

Author

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  • Dadson Awunyo-Vitor

    (Kwame Nkrumah University of Science and Technology)

  • Ruby Adjoa Sackey

    (University of Education)

Abstract

The study seeks to establish the relationship between foreign direct investment to Ghana’s agriculture sector and economic growth with secondary data mainly sourced from the World Development Indicator. The techniques employed to analyse the data include descriptive statistic, unit root test, Granger causality test and error correction model (ECM). The study accepted a neutrality hypothesis between foreign direct investment to the Ghanaian agricultural sector and its covariates; trade openness, capital and government expenditure. The study also revealed positive and significant relationship between economic growth and foreign direct invest flow to the agricultural sector and volume of trade respectively. However, government expenditure exhibit negative but significant relationship with economic growth. The study contributes to economic development literature from an important but neglected research context with regards to agricultural development via foreign direct investment to support job creation and overall economic development with particular reference to Ghana. Thus, the study recommends that policy should focus on flexible trade policies to attract more foreign direct investment (FDI) inflows to Ghana’s agricultural sector to accelerate growth across board.

Suggested Citation

  • Dadson Awunyo-Vitor & Ruby Adjoa Sackey, 2018. "Agricultural sector foreign direct investment and economic growth in Ghana," Journal of Innovation and Entrepreneurship, Springer, vol. 7(1), pages 1-15, December.
    • Handle: RePEc:spr:joiaen:v:7:y:2018:i:1:d:10.1186_s13731-018-0094-3
    DOI: 10.1186/s13731-018-0094-3
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    References listed on IDEAS

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    5. Chukwudi Emmanuel Edeh & Chidera Godson Eze & Sonia Onyinye Ugwuanyi, 2020. "Impact of foreign direct investment on the agricultural sector in Nigeria (1981–2017)," African Development Review, African Development Bank, vol. 32(4), pages 551-564, December.
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    7. Bakari, Sayef & El Weriemmi, Malek, 2022. "Exploring the Impact of Agricultural Investment on Economic Growth in France," MPRA Paper 113970, University Library of Munich, Germany.
    8. Yan Jin & Liyun Zhang & Lu Feng, 2022. "Success Factors of Cross-Border Agricultural Investments for Opium Poppy Alternative Project under China’s Belt and Road Initiative," Sustainability, MDPI, vol. 14(23), pages 1-16, November.
    9. Linus Nyiwul & Niraj P. Koirala, 2022. "Role of foreign direct investments in agriculture, forestry and fishing in developing countries," Future Business Journal, Springer, vol. 8(1), pages 1-12, December.
    10. Rashid, Furaha N. & Mwenda, Beny B. & Tengaa, Peter E., 2023. "Bridging Borders, Nourishing Nations: The Impact of Foreign Direct Investment on Tanzania's Cereal Yield," International Journal of Food and Agricultural Economics (IJFAEC), Alanya Alaaddin Keykubat University, Department of Economics and Finance, vol. 11(4), October.
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