External Financing for Inclusive Growth in Lower - Middle Income West African Countries: Foreign Direct Investment versus Official Development Assistance

Joseph Afolabi Ibikunle, Benedict I. Uzoechina, Godwin Olasehinde-Williams and Festus Bekun

International Journal of Public Administration, 2023, vol. 46, issue 16, 1166-1176

Abstract: Most developing countries are plagued with harsh economic realities, which motivate them to seek sustainable economic growth and development in line with goal eight of the United Nations Sustainable Development Goals. To this end, this paper investigated the source of external financing that is most helpful for achieving inclusive growth in lower-middle-income West African countries. The study is a panel analysis of annual data extending from 2000 to 2019. The study employed the Emirmahmutoglu and Kose Bootstrap Granger Causality Test, Westerlund Cointegration Test, Common Correlated Mean Group estimation technique, and Augmented Mean Group estimation technique for econometric analyses. The long-run empirical results from the study showed that both foreign direct investment and foreign aid have positive and significant effects on inclusive growth, although the impact of foreign direct investment is greater than that of foreign aid. A bi-directional causality was also found to exist between inclusive growth and foreign direct investment, while no causal relationship was detected between inclusive growth and foreign aid. Given the study’s empirical outcomes, it is recommended that West African countries prioritize macroeconomic policy reforms that provide enabling conditions for foreign direct investment to thrive rather than pursue foreign aid that more often than not are misdirected.

Date: 2023
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://hdl.handle.net/10.1080/01900692.2022.2077759 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:lpadxx:v:46:y:2023:i:16:p:1166-1176

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/lpad20

DOI: 10.1080/01900692.2022.2077759

Access Statistics for this article

International Journal of Public Administration is currently edited by Ali Farazmand

More articles in International Journal of Public Administration from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().