Abstract:
The study sought to investigate the effect of exchange rate movement on foreign
direct investment into the Economic Organization of West Africa Sates; to find the
relationship between ease of doing business and FDI flows as well as to examine the
effect of foreign direct investment on exchange rate movement. The study used casual
research design, quantitative approach, census sampling technique that considered the
15 countries in the jurisdiction, annual data period spanned from 2010 through 2021.
panel pooled cointegration, Pearson product moment correlation were deployed to
check appropriateness of the data. Through the Toda and Yamamoto augmented
granger causality test, the study observed that a uni-causality exist from EXRM to
FDI and from EODB to FDI. Multivariate regression test through Engle Granger
Least Square random effect and panel least square fixed effect estimations were
deployed. The result revealed that contrary to the harbored notion in academia,
exchange rate has significant negative effect on FDI with random estimation yet
insignificant for fixed effect estimation. Notwithstanding, ease of doing business has
positive relationship with FDI for both estimations. Also, the study found that FDI
flows inversely impact exchange rate in both random and fixed effect estimations. The
findings contribute to the existing understanding on the nexus between the discussed
variables. The novelty of the study is the exploration of the bi-directional relationship
between FDI and EXRM which is scarce in literature on ECOWAS. The study
recommends member state governments to implement pragmatic economic policies in
order to check FDI flows
Description:
A Dissertation in the Department of Applied Finance and Policy
Management, School of Business, submitted to the School of
Graduate Studies, in partial fulfilment of the
requirements for award of the degree of
Master of Business Administration
(Finance)
in the University of Education, Winneba
