DETERMINANTS OF FOREIGN DIRECT INVESTMENT USING MODERATING AND MEDIATING EFFECT: A CASE STUDY OF GHANA
DETERMINANTS OF FOREIGN DIRECT INVESTMENT USING MODERATING AND MEDIATING EFFECT: A CASE STUDY OF GHANA
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Date
2022
Authors
STEPHEN, QUAO JUNIOR
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Abstract
The purpose of the study was to establish the determinants of foreign direct
investment in Ghana. The study specifically focused on the effects of: trade openness,
inflation, labour and capital investment in Ghana. The study also assessed the
moderating effect government policies on the relationship between financial
development and its determinants in Ghana. The study employed descriptive research
design for the study. Secondary data was collected through World Bank Data
sampling was adopted which was appropriate for getting a sample for the study. Also
secondary data was collected from Ghana statistical website; Data analysis was done
using statistical package for social science (SSPS). Descriptive statistic was used to
present the findings of the study supported by Linear Regression Analysis using
Andrew Hayes Moderation and Mediation Effect being undertaken to provide
inference. The variables namely trade openness, Inflation, Labour and Capital were
found as determinants that affect Foreign Direct Investment which in a long run affect
Financial Development and Economic Growth of Ghana.
Further, the effects of the determinants on Foreign Direct Investment were seen to be
heavily moderated by government policies and democracy index. The study suggested
that institutions be strengthened (in terms of credit risk management, financial
structure, and corporate governance/management efficiency), that the government
pursue expansionary policies to spur economic growth, that foreign direct investment
in Ghana becomes attractive, and that the volume of exports be increased by further
opening up the Ghanaian economy.