Effects of Chinese Investment (FDI) and Service Trade on Economic Community of West Africa States (ECOWAS) Economic growth

Grafoute Amoro

Abstract


This paper explored effect of Chinese investment and service trade on ECOWAS countries economic growth. The paper uses an amplified cumulative production function growth model. Granger causality and co-integration test were used in the empirical analysis, employing Augmented Dickey-Fulls (ADF) and stationary test, the variables proves to be integrated of the order one (1) at first difference. The granger method has been performed to test the hypothesis that causality is running from Chinese investment to ECOWAS countries economic growth while there is no causal relationship between Chinese FDI and bilateral service trade.

The analysis is carried out using Ordinary Least Square method, on times series data covering the period 1979-2000.The focus shows ECOWAS countries-China bilateral trade enhance western African countries economic growth. Yet it should be a reinforcing of the policy priority for ECOWAS countries to make sure this tie and the upcoming Chinese Foreign investment will be profitable, in term of transfer and acquisition of advanced technology.


References


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ISSN : 2251-1555