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Foreign direct investment, technological spillover, and total factor productivity growth in Ghana

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  • Ronald Ebenezer Essel

    (University of Cape Coast (UCC))

Abstract

This study examined the linkages between foreign direct investment (FDI) and productivity, and also assessed the technological spillover effect from FDI on productivity in Ghana. Using an aggregate/macro (industry-level) panel dataset for 19 industries, spanning 2010–2020, the research investigated the impact of FDI and its associated technological spillover effect on productivity in Ghana, using total factor productivity (TFP) as a measure of productivity. A robust dynamic panel system of generalized method of moment (GMM) which controls for unobserved heterogeneity, heteroskedasticity, simultaneity, reverse causality, and endogeneity was employed for the empirical estimation. Results revealed that whilst technological spillover, tax, and inflation demonstrated negative relationships with TFP; FDI, physical capital stock, human capital, research and development, trade openness, population growth, interest rate, and exchange rate exhibited a positive relationship with TFP. The study findings have a relevant policy, theoretical and managerial implications for the consideration of knowledge seekers such as policymakers, industrial practitioners, corporate managers of transnational corporations (TNCs), development agents, consultants, financiers, as well as knowledge creators such as scholars/researchers in academia.

Suggested Citation

  • Ronald Ebenezer Essel, 2023. "Foreign direct investment, technological spillover, and total factor productivity growth in Ghana," SN Business & Economics, Springer, vol. 3(8), pages 1-34, August.
    • Handle: RePEc:spr:snbeco:v:3:y:2023:i:8:d:10.1007_s43546-023-00514-4
    DOI: 10.1007/s43546-023-00514-4
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    More about this item

    Keywords

    Foreign direct investment (FDI); Ghana; Technological spillover; Total factor productivity;
    All these keywords.

    JEL classification:

    • A1 - General Economics and Teaching - - General Economics
    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling
    • M0 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - General
    • M1 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration
    • M2 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics

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