DETERMINANTS OF INVESTMENTS: A CASE STUDY OF COTE D’IVOIRE
DETERMINANTS OF INVESTMENTS: A CASE STUDY OF COTE D’IVOIRE
Purpose- Based on the importance of investments in supporting the economic growth in the country, the main objective of this study is to investigate the determinants of the investment in Cote d’Ivoire over the period 1980-2020. In order to achieve the objective, this study examines the interactive effect of external debt, communication infrastructures, imports and inflation on the investments in Cote d’Ivoire.
Methodology- Annual time series data over the period 1980-2020 were employed in this study. The data are obtained from the World Bank. The ADF unit root test, Johansen cointegration test, OLS model, Granger causality test, and CUSUM test were applied to analyze the data. Ordinary Least Squares (OLS) model has been used in this study to estimate the coefficient of the variables, and it has been subjected to a number of statistical diagnostic tests, namely, the normality, serial correlation, and heteroscedasticity tests to ascertain its statistical adequacy.
Findings- The ADF unit root test results indicated that all variables in the model are not stationary at the level but became stationary after first differencing. The Cointegration test pointed to a significant long-run relationship among the variables. Besides, the results of OLS model showed that investment is positively and significantly related with communication infrastructures, importing and inflation, but it is related negatively and insignificantly with external debt. Imports have the biggest effect on the investment. The Granger causality test shows that there are no short-run causality relationships between the variables. However, there are bidirectional long-run causality relationships between investment, external debt and importing, and unidirectional long-run causality relationships running from communication infrastructures and inflation to investment. Lastly, CUSUM test indicated that there are no structural changes in the model.
Conclusion- The study therefore recommends that the government should use external debt more efficiently, reduce corruption, improve the infrastructure and create an attractive investment climate, as well as reducing most tariff and nontariff barriers, which will support the investment in the country.
Keywords:
Cote d’Ivoire, Ivory Coast, investments, external debt VAR,
___
- Adamu, I. M. (2018). Public investment in Nigeria. Does external debt matter? Academic Journal of Economic Studies, 2(4), 120-138.
- Alawneh, A., Alfawwaz, T., & Shawaqfeh, G. (2015). The Impact of the Fiscal and Quantitative Monetary Policies on the Domestic and Foreign Direct Investment in Jordan: An Empirical Study. International Journal of Academic Research in Accounting, Finance and Management Sciences, 5(4), 1-10.
- Augustine, O., Olushola, A., & Abiodun, O. (2019). The impact of capital gains tax on investment, social and economic development in Nigeria. European Journal of Business and Management, 11(2), 30-37.
- Baddeley, M. C. (2003). Investment: theories and analysis. Houndmills: Palgrave Macmillan.
- Boahen, E. A., & Evans, O. (2014). The effect of exchange rate volatility on foreign direct investment in Ghana. International Journal of Economic Behaviour and Organization, 2(2), 20-28.
- Bosede, A., Abalaba, B., & Afolabi, D. (2013). Transport Infrastructure Improvement and Economic Growth in Nigeria. International Journal of Humanities and Social Science Invention, 2(8). 26-31.
- CEPICI. (2012). Nouveau Code d'Investissement. Cote d'Ivoire: CEPICI.
- Costamagna, R. (2015). Inflation and R&D investment. Journal of Innovation Economics & Management, (17). 143-163.
- Deloitte. (2017). Invest in Côte d’Ivoire. https://www2.deloitte.com/za/en/pages/deloitte-africa/articles/invest-in-cote-divoire.html
- Edame, G., & Okoi, W. (2014). The impact of taxation on investment and economic development in Nigeria. Academic Journal of Interdisciplinary Studies, 3(4). 209-2018.
- Fornah, S., & Yuehua, Z. (2017). Empirical Analysis on the Influence of Interest Rates on Foreign Direct Investment in Sierra Leone. International Journal of Research in Business Studies and Management, 4(12), 28-35.
- Khan, Y., Wang, M., & Hassan, T. (2018). Foreign Direct Investment and Import-Export: The case of Pakistan. Research Journal of Economics, 2(3). 1-7.
- Khurriah, H., & Istifadah, N. (2019). The Role of Infrastructure in Indonesia’s Economic Growth. International Journal of Advances in Scientific Research and Engineering, 5(7). 215-222.
- Mohsen, A. S. (2015). The relationship between trade openness and Investment in Syria. Journal of Life Economics, 2(2). 19-28.
- Onwe, O. J., & larenwaju, R. R. (2014). Impact of Inflation on Corporate Investment in the Sub-Saharan African Countries: An Empirical Analysis of the West-African Monetary Zone. International Journal of Business and Social Science, 5(8), 189-199.
- Oxford Business Group. (2018). The Report: Côte d'Ivoire 2022
- Oxford Business Group. (2022). The Report: Côte d'Ivoire 2018
- Qiying, W. (2020). Empirical Research on the Investment Performance of Information and Communication Technology in China. International Journal of Economics and Finance, 12(2). 94-106.
- Rahman, M. Z. (2011). An Empirical Study on the Relationship between Foreign Investment and International Trade in Bangladesh. International Journal of Financial Research, 2(2). 33-39.
- Santi, C., & Wisit, C. (2007). Imports, Exports and Foreign Direct Investment Interactions and Their Effects. Working Papers 4507, Asia-Pacific Research and Training Network on Trade (ARTNeT), an initiative of UNESCAP and IDRC, Canada.
- Sisay, A. M. (2010). Determinants of private investment in Ethiopia. Ethiopian Journal of Economics, 19(1). 75-126.
- Toader, E., Firtescu, B., Roman, A., & Anton, S. (2018). Impact of Information and Communication Technology Infrastructure on Economic Growth: An Empirical Assessment for the EU Countries. Sustainability, 10(10). 1-22.
- World Bank. (2021). World Bank Data
- Yayın Aralığı: Yılda 4 Sayı
- Başlangıç: 2012
- Yayıncı: PressAcademia
Sayıdaki Diğer Makaleler
THE IMPACT OF FINANCIAL LITERACY ON RISK PROPENSITY MEDIATED BY ACCESS TO FINANCE
Selma Dzifa ADDO, Joseph ASANTEY, David Mensah AWADZIE
Bilgi YILMAZ, A. Alper HEKIMOGLU
THE INFLUENCE FACTORS OF CONSUMERS’ COMPREHENSIVE CAR INSURANCE DEMAND: EVIDENCE FROM TURKEY
DETERMINANTS OF INVESTMENTS: A CASE STUDY OF COTE D’IVOIRE