Bounds testing approach: an examination of foreign direct investment, trade, and growth relationships

Joseph Frimpong () and Eric Oteng-Abayie

MPRA Paper from University Library of Munich, Germany

Abstract: Purpose: This paper examines the long-run impact of foreign direct investment and trade on economic growth in Ghana. Methodology: Using an augmented aggregate production function (APF) growth model, we apply the bounds testing (ARDL) approach to cointegration which is more appropriate for estimation in small sample studies. The data span for the study is from 1970 to 2002. Findings: The results indicated the impact of FDI on growth to be negative which is consistent with other past studies. Trade however was found to have significant impact on growth.

Keywords: Ghana; ARDL cointegration; unit roots; equilibrium-correction; FDI; Trade (search for similar items in EconPapers)
JEL-codes: C32 F14 F39 (search for similar items in EconPapers)
Date: 2006-08-09, Revised 2006-10-09
New Economics Papers: this item is included in nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (37)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:352

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