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" Predictive Impact of Country Risk Effects on the Net Foreign Direct Investment Inflow to the Economic Community of West African States Region "
Dissou, Zingan
Machnic, John
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Latin Dissertation
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| Language of Document
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English
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| Record Number
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1106892
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TLpq2419053287
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| Main Entry
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Dissou, Zingan
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Machnic, John
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| Title & Author
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Predictive Impact of Country Risk Effects on the Net Foreign Direct Investment Inflow to the Economic Community of West African States Region\ Dissou, ZinganMachnic, John
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| College
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Capella University
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| Date
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2020
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| student score
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2020
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| Degree
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Ph.D.
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| Page No
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137
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| Abstract
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Foreign direct investment (FDI) is a topic of importance in least developed countries (LDCs) and developing nations. In Africa, FDI serves as a critical catalyst and a complement to domestic development in countries with emerging economies, but country risk factors can materially affect the amount, type, and timing of such investments. The present study addressed an omnibus question that asked, what is the relationship between net foreign direct investment inflow into Economic Community of West African States (ECOWAS) countries and the country risk factors of high institutional risks and instability of the macroeconomic environment? The country risks were divided into two categories, institutional risks (i.e., voice and accountability, political stability, control of corruption, the rule of law, government effectiveness, and regulatory quality) and macroeconomic factors (i.e., merchandise trade, gross domestic product [GDP] growth rate, inflation, international trade openness indicator, unemployment rate, and exchange rate). A nonexperimental correlational research design was selected, and secondary data obtained from the United Nations and the World Bank were analyzed using multiple regression techniques. The full population was sampled, and it included the 15 member nations of the ECOWAS: Benin, Burkina Faso, Cape Verde, Gambia, Ghana, Guinea, Guinea-Bissau, Ivory Coast, Liberia, Mali, Niger, Nigeria, Senegal, Sierra Leone, and Togo. After testing the methodological assumptions to ensure the data were fit for analysis, a multiple linear regression was run to test the study’s hypotheses and answer the omnibus research question. Of the 12 country risks evaluated, only merchandise trade and the international trade openness indicator were significant predictors of FDI. The relationship between FDI and merchandise trade was significant but negative, which meant that as merchandise trade decreased, FDI increased. The relationship between FDI and international trade openness was positive, meaning that as countries became more welcoming to foreign trade, the countries also benefited from higher levels of FDI. The importance of FDI in the ECOWAS region cannot be understated, and continued economic research and support is needed to help these LDCs and developing nations combat poverty and further develop their emerging economies.
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Finance
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