Foreign Direct Investment and Poverty in the ECOWAS Region

Kallon, Emmanuel Brima (2020) Foreign Direct Investment and Poverty in the ECOWAS Region. Doctoral thesis (PhD), Manchester Metropolitan University.

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Abstract

This study aims to examine the impact of FDI on poverty in the ECOWAS region, covering the period between 1990 and 2018. The research design is a mixed-methods quantitative approach that uses two phases of data collection and analysis. The first phase is the secondary data quantitative study and is followed by the second phase, a primary data quantitative study, the latter of which complements the findings of the former. The data sources were both secondary and primary, collected from renowned websites, questionnaires and documentary reviews. The data were analysed using quantitative estimation techniques, and the study employed the static estimation techniques OLS, FE and RE, and a dynamic estimation technique, namely GMM. Four poverty measures were utilised as dependent variables (infant mortality, the Human Development Index, GDP per capita and household consumption), along with FDI inflow based on United States Dollars at current prices as the main independent variable. The result of the study indicates that the impact of FDI on poverty in the ECOWAS region is mixed, in that it has a positive effect when using HDI and GDP per capita as poverty measures. However, FDI has a negative impact on poverty when using HCON as a measure, and when using MORT as a poverty measure, the result is inconclusive. Therefore, it is concluded that the impact of FDI on poverty in the ECOWAS region is sensitive to the poverty measure used in the study, and it is also dependent on econometric techniques. The study recommends that ECOWAS members and other stakeholders, when examining FDI and poverty relationships, should be critical of the poverty measure adopted, in order to assure the maximum impact of the result. Moreover, ECOWAS member countries should explore new avenues to attract more FDI inflow and diversify it to all sectors of the economy for a more significant effect on poverty reduction and the attainment of SDGs. This study contributes empirically to the extant literature in diverse ways, i.e. its unique findings and its novelty, since it is the first to be undertaken in the ECOWAS region.