Exchange Rate Volatility and Domestic Investment: Evidence from Twelve ECOWAS Countries
Anthony Akinlo and
Olufemi G. Onatunji
African Journal of Economic Review, 2020, vol. 08, issue 2
This paper examines the dynamic relationship between exchange rate volatility and domestic investment for twelve ECOWAS countries over the period 1986-2017. We employed the ARDL bound testing approach for co-integration and error correction modeling techniques by incorporating real GDP, real interest rate, real exchange rate, and exchange rate volatility as essential drivers of domestic investment. The results of the ARDL Bound test confirm the existence of long-run relationship among the variables in the selected countries. Furthermore, the findings show that exchange rate volatility is negative and statistically significant only in the case of Nigeria, Sierra Leone, Guinea, Gambia, Cote d’lvoire, Togo, and Liberia but insignificant in Cabo Verde, and Senegal. However, contrary to many theoretical predictions and hypotheses, exchange rate volatility is found to be positive but insignificant in Ghana, Benin, and Burkina Faso.
Keywords: Financial; Economics (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:ags:afjecr:304721
Access Statistics for this article
More articles in African Journal of Economic Review from African Journal of Economic Review
Bibliographic data for series maintained by AgEcon Search ().