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American Journal of Innovative Research & Applied Sciences
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| | ARTICLES | Am. J. innov. res. appl. sci. Volume 4, Issue 3, Pages 85-95 (March 2017) |
American Journal of innovative
Research & Applied Sciences
Research & Applied Sciences
ISSN 2429-5396 (Online)
OCLC Number: 920041286
OCLC Number: 920041286
|
| MARCH | VOLUME 4 | N° 3 | 2017 |
ABSTRACT
Background: The West African countries have been identified with inadequate capital for investment, being one of the poorest sub-regions in the world. Objective: The objective of this study is to examine the nature of relationship between foreign capital inflows and the level of economic growth in selected West African Countries and to observe the causality between foreign capital inflows components and economic growth. Method: This study employed panel data from 1980 to 2015 to examine the impact of foreign capital inflows on the economic growth in the selected West African countries using Two Gap Theory. In addition, we adopt Pedroni cointegration and granger causality test. Result: The findings indicate shows the existence of long run relationship between foreign capital inflows and economics growth in selected West African country. All the variables were positive but only foreign direct investment is significant. Net migrant remittance, foreign direct investment and official development assistance cause growth in the short run. Conclusion: The study concludes that foreign capital inflows is imperative in closing the savings-investment gap required for economic growth in selected west African countries. Recommendation: The study recommends policy to encourage capital inflows via provision of enabling environment for foreign investment, reduction political instability and diversification of domestic economies.
Keywords: capital inflows, panel cointegration, fully modified ordinary Least square, penal causality, economic growth.
JEL Classification : F21, C34, F43, O16.
Background: The West African countries have been identified with inadequate capital for investment, being one of the poorest sub-regions in the world. Objective: The objective of this study is to examine the nature of relationship between foreign capital inflows and the level of economic growth in selected West African Countries and to observe the causality between foreign capital inflows components and economic growth. Method: This study employed panel data from 1980 to 2015 to examine the impact of foreign capital inflows on the economic growth in the selected West African countries using Two Gap Theory. In addition, we adopt Pedroni cointegration and granger causality test. Result: The findings indicate shows the existence of long run relationship between foreign capital inflows and economics growth in selected West African country. All the variables were positive but only foreign direct investment is significant. Net migrant remittance, foreign direct investment and official development assistance cause growth in the short run. Conclusion: The study concludes that foreign capital inflows is imperative in closing the savings-investment gap required for economic growth in selected west African countries. Recommendation: The study recommends policy to encourage capital inflows via provision of enabling environment for foreign investment, reduction political instability and diversification of domestic economies.
Keywords: capital inflows, panel cointegration, fully modified ordinary Least square, penal causality, economic growth.
JEL Classification : F21, C34, F43, O16.
*Correspondant author and authors Copyright © 2017:
| Musibau, Hammed Oluwaseyi 1 | Hussin, Abdullah 2 | Suraya, Mahmood 3 | Suraya, Ismail 4 | and | Hammed, Agboola Yusuf 5 |
| Musibau, Hammed Oluwaseyi 1 | Hussin, Abdullah 2 | Suraya, Mahmood 3 | Suraya, Ismail 4 | and | Hammed, Agboola Yusuf 5 |
Authors Contact
Affiliation.
1. 3. 4. Faculty of Economy and Science Management | Universiti Sultan Zainal Abidin (UniSZa) | Kuala Terengganu | Malaysia |
2. 5. School of Economics | Finance and Banking | College of Business| Universiti Utara | Sintok Kedah | Malaysia |
1. 3. 4. Faculty of Economy and Science Management | Universiti Sultan Zainal Abidin (UniSZa) | Kuala Terengganu | Malaysia |
2. 5. School of Economics | Finance and Banking | College of Business| Universiti Utara | Sintok Kedah | Malaysia |
This article is made freely available as part of this journal's Open Access: ID | Musibau ManuscriptRef.1-ajira210217 |
Research Article
THE IMPACT OF FOREIGN CAPITAL INFLOWS ON ECONOMIC GROWTH IN SELECTED WEST AFRICAN COUNTRIES
| Musibau, Hammed Oluwaseyi 1 | Hussin, Abdullah 2 | Suraya, Mahmood 3 | Suraya, Ismail 4 | and | Hammed, Agboola Yusuf 5 |. Am. J. innov. res. appl. sci. 2017; 4(3):96-104.
| PDF FULL TEXT | | Received | 21 February 2017 | | Accepted | 10 March 2017 | | Published 21 March 2017 |
THE IMPACT OF FOREIGN CAPITAL INFLOWS ON ECONOMIC GROWTH IN SELECTED WEST AFRICAN COUNTRIES
| Musibau, Hammed Oluwaseyi 1 | Hussin, Abdullah 2 | Suraya, Mahmood 3 | Suraya, Ismail 4 | and | Hammed, Agboola Yusuf 5 |. Am. J. innov. res. appl. sci. 2017; 4(3):96-104.
| PDF FULL TEXT | | Received | 21 February 2017 | | Accepted | 10 March 2017 | | Published 21 March 2017 |