Assessing the Key Determinants of Foreign Direct Investment in ECOWAS

This research is carried out to examine the key determinants of foreign direct investment inflow in ECOWAS. Secondary panel data consist of a sample of 15 ECOWAS member countries covering the periods from 2000 to 2013. The required data set for the selected countries were obtained from World Bank database and United Nation Conference of Trade and Development (UNCTAD). The estimation techniques conducted in this paper are: fixed effect, random effect and generalised least square (GLS) estimation. The Hausman test results chose fixed effect over random effect. On the basis of the empirical outcomes, it is therefore important to conclude that the key determinants of FDI inflows in the ECOWAS region that are Infrastructure, Trade openness, Inflation, political instability/violence and good governance. All are positively related to FDI inflows except political instability/violence which is negatively related to FDI. Suggested policies would be, first of all, the region should put great attention on the high quality infrastructure system, and quality communication system. The region should also institute as well as improve on governance structure under which FDI thrives