Foreign direct investment, three main sectors of the economy and economic growth: Evidence from West African Countries

Abstract

Abstract. The study investigates the effect of foreign direct investment (FDI) on economic growth in 9 West African countries namely; Burkina-Faso, Cote d’Ivoire, Ghana, Guinea Bissau, Liberia, Niger, Nigeria, Senegal and Sierra Leone. Using panel data econometrics for the period 2000-2016, we found empirical evidence that suggests that the effect of FDI on economic growth is negative and statistically significant. Our results show that neither foreign direct investment nor the primary sector of economy (PSE) of this region are not an adequate mechanism to accelerate economic growth in West African countries. While, the secondary and tertiary sectors of economy of the region have a positive effect and statistically significant to explain the growth. Keywords. Foreign direct investment, Sectors of the economy, Economic growth, Panel data, West African Countries. JEL. C23, F62, N17.