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Bivariate causality analysis between FDI inflows and economic growth in Ghana

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  • Frimpong, Joseph Magnus
  • Oteng-Abayie, Eric Fosu

Abstract

The main objective for this paper is to study the causal link between FDI and GDP growth for Ghana for the pre- and post-SAP periods. We also study the direction of causality between the two variables, based on the more robust Toda-Yamamoto (1995) Granger no-causality test which allows the Granger test in an integrated system. Annual time-series data covering the period 1970-2002 was used. The study finds no causality between FDI and growth for the total sample period and the pre-SAP period. FDI however caused GDP growth during the post-SAP period.

Suggested Citation

  • Frimpong, Joseph Magnus & Oteng-Abayie, Eric Fosu, 2006. "Bivariate causality analysis between FDI inflows and economic growth in Ghana," MPRA Paper 351, University Library of Munich, Germany, revised 09 Oct 2006.
    • Handle: RePEc:pra:mprapa:351
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Ghana; FDI; seemingly unrelated regression; Granger causality; cointegration;
    All these keywords.

    JEL classification:

    • O49 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Other
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • F39 - International Economics - - International Finance - - - Other

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