The purpose of the contemporary research was the examination of macroeconomic determinants of foreign direct investment inflows into post-conflict Sierra Leone for the period, 2002-2015, and whether the determinants have a long-run and short-run association with FDI. A complementary exploration was the likely impulse response effect on FDI and GDP of a shock to FDI. The research method was quantitative, applying time series data with 56 observations and 6 variables. Applying the Phillips-Ouliaris cointegration model, the results indicated a statistically significant long-run relationship between FDI inflows and its determinants (Rho = --17.064, Tau = -2.996, p < .05). Moreover, the error correction model (lerrorECM) utilized to examine the short-run deviation from the long-run had the predictable sign, but was statistically insignificant (?lerrorECM = -.1542, SE = .0825, t = -1.87, p = .0680), signifying the adjustment towards equilibrium happened in the same reviewed period. Additionally, the effect on FDI of a shock to FDI had a short-term positive impact of up to the sixth period, and a negative long-term impact beginning in the seventh period. Nevertheless, the research was limited to 14 post-conflict years (2002-2015), which may be inadequate to achieve a comprehensive determinant of FDI inflows.
Acheampong, P., & Osei, V. (2014). Foreign direct investment (FDI) inflows into Ghana: Should the focus be on infrastructure or natural resources? Short-run and long-run analyses. International Journal of Financial Research, 5(1), 42-51. doi:10.5430/ijfr.v5n1p42
Adejumo, A. V. (2013). Foreign direct investments and manufacturing sector performance in Nigeria, (1970-2009). Australian Journal of Business and Management Research, 3(4), 39-56. Retrieved from http://www.ajbmr.com/
Adeleke, A. I. (2014). FDI-growth nexus in Africa: Does governance matter? Journal of Economic Development, 39(1), 111-135. Retrieved from http://acoms.jams.or.kr/journal.do?method=journalintro&journalSeq=J000001&menuId=&introMenuId=0101
Ahmed, M. U., & Pulok, M. H. (2013). The role of political stability on economic performance: The case of Bangladesh. Journal of Economic Cooperation and Development, 34(3), 61-99. Retrieved from http://www.sesric.org/publications-jecd.php
Aitken, B., Hansen, G.H., & Harrison, A. (1997). Spillovers, foreign investment, and export behavior. Journal of International Economics, 43,103–32. Retrieved from https://www.journals.elsevier.com/journal-of-international-economics/
Akhtar, M. A., Khan, M. B., & Hussain, S. (2013). Determinants of resource-seeking foreign direct investment: Co-integration and causality analysis for Saudi Arabia. British Journal of Economics, Management & Trade, 3(4), 468-478. http://dx.doi.org/10.9734/BJEMT/2013/3739
Aliber, R. Z. (1970). A theory of direct foreign investment. In C. Kindleberger (Ed.), The International Corporation. Cambridge. MA: MIT Press.
Anderson, R. C., & Reeb, D. M. (2003). Founding-family ownership and firm performance: Evidence from the S&P 500. The Journal of Finance, 58(3), 1301-1328. Retrieved from http://www.afajof.org/details/landingpage/2866131/About-the-JF.html
Anna, C., Karambakuwa, R. T., Webster, D., Felex, T., Zivanai, O., Lovenmore, M., & Mudavanhu, V. (2012). The impact of interest rate on foreign direct investment: A case study of the Zimbabwean economy. International Journal of management Sciences and Business Research, 1(5), 1-24. Retrieved from http://www.ijmsbr.com/
Asiedu, E. (2002), On the determinants of foreign direct investment to developing countries: Is Africa dfferent? World Development, 30(1), 107-119. Retrieved from https://www.journals.elsevier.com/world-development/
Awan, M. Z., Khan, B., & Zaman, K. U. (2011). Economic determinants of foreign direct investment (FDI) in commodity producing sector: A case study of Pakistan. African Journal of Business Management, 5(2), 537-545. doi:http://dx.doi.org.proxy2.ncu.edu/10.5897/AJBM10.767
Babatunde, A. (2011). Trade openness, infrastructure, FDI and growth in Sub-Saharan African countries. Journal of Management Policy & Practice, 12(7), 27-36. Retrieved from http://www.na-businesspress.com/jmppopen.html
Baby S., & Sharma, A. M. (2017). Determinants of foreign direct investment inflows in India. International Journal of Applied Economic Research, 15(2), 139-149. Retrieved from http://www.serialsjournals.com/journal-detail.php?journals_id=22
Bari, M. A. (2013). Foreign direct investment and economic growth in Bangladesh and India: A comparative study. South Asian Journal of Management, 20(1), 7-37. Retrieved from http://www.sajm-amdisa.org/
Bartels, F. L., Napolitano, F., & Tissi, N. E. (2014). FDI in Sub-Saharan Africa: A longitudinal perspective on location-specific factors (2003–2010). International Business Review, 23, 516-529. doi:10.1016/j.ibusrev.2013.08.013
Bayar, Y. & Ozel, H. A. (2014). Determinants of foreign direct investment inflows in the transition economies of European Union. International Journal of Research in Commerce, Economics, and Management, 4(10), 49-53. Retrieved from http://ijrcm.org.in/article_info.php?article_id=4893
Bekana, D. M. (2016). Determinants of foreign direct investment in Ethiopia: Time series evidence from 1991 – 2013. The Journal of developing Areas, 50(1), 141-155. Retrieved from https://muse.jhu.edu/journal/258
Bibi, S., Ahmad, S. T., & Rashid, H. (2014). Impact of trade openness, FDI, exchange rate and inflation on economic growth: A case study of Pakistan. International Journal of Accounting and Financial Reporting, 4(2), 236-257.
https://dx.doi.org/10.5296/ijafr.v4i2.6482
Billington, N. (1999). The location of foreign direct investment: An empirical analysis. Applied Economics, 31, 65-72.
Buckley, P. J., & Casson, M. C. (2009). The internalisation theory of the multinational enterprise: A review of the progress of a research agenda after 30 years. Journal of International Business Studies, 40(9), 1563-1580. doi:http://dx.doi.org/10.1057/jibs.2009.49
Buckley, P., & Casson, M. (2011). Marketing and the multinational: Extending internalisation theory. Journal of the Academy of Marketing Science, 39(4), 492-508. doi:10.1007/s11747-010-0243-0
Chakrabarti, A. (2001). The determinants of foreign direct investments: Sensitivity analyses of cross-country regressions. Kyklos, 54(1), 89-114. doi: 10.1111/1467-6435.00142
Chakraborty, D., & Mukherjee, J. (2012). Is there any relationship between foreign direct investment, domestic investment and economic growth in India? A time series analysis. Review of Market Integration, 4(3): 309-337. http://journals.sagepub.com/home/rmi
Chia, S. M., & Ogbaji, E. O. (2013). Impact of foreign direct investment on telecommunication sector on Nigerian economy. International Journal of Modern Social Sciences, 2(3), 195-215. Retrieved from http://www.modernscientificpress.com/Journals/IJMSS.aspx
Cowpertwait, P. S. P., & Metcalfe, A. V. (2009). Introductory time series with R (Eds.). New York, NY: Springer Publishing.
Crenshaw, E., & Robison, K. (2010). Socio-demographic determinants of economic growth: Age-structure, preindustrial heritage and sociolinguistic integration. Social Forces, 88(5), 2217-2240. https://academic.oup.com/sf
Danish, R. A., & Akram, A. (2014). Determinants of FDI in Pakistan: An empirical analysis. Journal of International Business and Economics, 2(2), 61-70. Retrieved from http://jibe-journal.org/domains/JIBE-JOURNAL/Default.aspx
Denisia, V. (2010). Foreign direct investment theories: An overview of the main FDI theories. European Journal of Interdisciplinary Studies, 2(2), 104-110. Retrieved from http://www.ejist.ro/
Dinda, S. (2014). Natural resources determining FDI in Nigeria: An empirical investigation. International Journal of Research in Business and Social Science, 3(1), 75-88. Retrieved from http://www.ssbfnet.com/ojs/index.php/ijrbs
Dritsaki, C., & Dritsaki, M. (2012). The stability of money demand: Some evidence from Turkey
The IUP Journal of Bank Management, 11(4), No. 4, 7-28. Retrieved from https://inomics.com/iup-journal-bank-management-call-papers-hyderabad
Dua, P. & Garg, R. (2015). Macroeconomic determinants of foreign direct investment: Evidence from India. The Journal of Developing Areas, 49(1), 133-155. Retrieved from https://muse.jhu.edu/journal/258
Dunning, J. H. (1988). The eclectic paradigm of international production: A restatement and some possible extensions. Journal of International Business Studies, 19(1), 1-31. Retrieved from http://www.palgrave-journals.com/jibs/index.html
Dunning, J. H. (2001). The eclectic (OLI) paradigm of international production: Past, present and future. International Journal of the Economics of Business, 8(2), 173-190. doi:10.1080/13571510110051441
Eita, J. H. (2012). Explaining interest rate spread in Namibia. The International Business & Economics Research Journal, 11(10), 1123-1132. Retrieved from https://www.cluteinstitute.com/journals/international-business-economics-research-journal-iber/
Eregha, P. B. (2015). Foreign direct investment inflow, volatility, and domestic investment in West Africa. The Journal of Developing Areas, 49(2), 273-294. Retrieved from https://muse.jhu.edu/article/558496
Ezeoha, A. E., & Cattaneo, N. (2012). FDI flows to Sub-Saharan Africa: The impact of finance, institutions, and natural resource endowment. Comparative Economic Studies, 54(3), 597-632. doi:http://dx.doi.org/10.1057/ces.2012.18
Faroh, A., & Shen, H. (2015). Impact of interest rates on foreign direct investment: Case study Sierra Leone economy. International Journal of Business Management and Economic Research, 6(1),2015,124-132. Retrieved from http://www.ijbmer.com/
Fauzel, S., Seetanah, B., & Sannassee, R. V. (2015). Foreign direct investment and welfare nexus in Sub-Saharan Africa. The Journal of Developing Areas, 49(4), 271-283. Retrieved from https://muse.jhu.edu/journal/258
Fehér, H., & Poór, J. (2013). Foreign trade competitiveness of Sub-Saharan African countries - The effects of China’s trade expansion. Studia Universitatis Babes-Bolyai, 58(2), 3-21. Retrieved from http://studia.ubbcluj.ro/index_en.php
Fiodendji, K., & Evlo, K. (2015). Do institutions quality affect FDI inflows in Sub-Saharan African countries? Journal of Applied Finance and Banking, 5(1), 111-135. Retrieved from https://www.scienpress.com/journal_focus.asp?Main_Id=56
Fofana, M. F. (2014). The influence of measures of economic freedom on FDI: A comparison of Western Europe and Sub-Saharan Africa. Global Economy Journal, 14(3-4), 399-424. Retrieved from http://www.degruyter.com/view/j/gej
Goh, S. K., & Wong, K. N. (2011). Malaysia's outward FDI: The effects of market size and government policy. Journal of Policy Modeling, 33, 497-510. doi:10.1016/j.jpolmod.2010.12.008
Gupta, P., & Singh, A. (2016). Determinants of foreign direct investment inflows in BRICS nations: A panel data analysis. Emerging Economy Study, 2(2), 181-198. Retrieved from http://journals.sagepub.com/toc/emia/2/2
Gwenhamo, F. (2011). Foreign direct investment in Zimbabwe: The role of institutional and macroeconomic factors. South African Journal of Economics, 79(3), 211-223. doi:10.1111/j.1813-6982.2011.01283.x
Hasnat, B. (2013). The US and Chinese foreign direct investment in Africa. China-USA Business Review, 12(8), 735-745. Retrieved from http://www.davidpublishing.com/journals_info.asp?jId=1648
Hua, P. (2014). The determinants of China’s outward direct investments in Africa: The role of the Chinese government’s policies. International Journal of Economics and Business Modeling, 5(1), 238-243. Retrieved from http://www.bioinfopublication.org/journal.php?opt=gen&jouid=BPJ0000225&detail=Instruction%20for%20Authors
Ismaila, M., & Imoughele, L. E. (2015). Macroeconomic determinants of economic growth in Nigeria: A co-integration approach. International Journal of Academic Research in Economics and Management Sciences, 4(1), 34-46. doi: 10.6007/IJAREMS/v4-i1/1485
Javed, T., Nawaz, S., & Gondal, M. A. (2014). International incidences, macroeconomic
variables and their volatility effect on economic growth: Empirical evidence from
Pakistan. International Journal of Academic Research in Economics and
Management Sciences, 3(4), 81-99. Retrieved from
http://hrmars.com/index.php/pages/detail/IJAREMS
Jepkurui, K. S., & Olweny, T. (2015). The effect of macroeconomic factors on performance of foreign direct investment in Kenya. Strategic Journal of Business & Change Management, 2(101), 1492-1506. Retrieved from http://www.strategicjournals.com/
Júlio, P., Pinheiro–Alves, R., & Tavares, J. (2013). Foreign direct investment and institutional reform: evidence and an application to Portugal. Portuguese Economic Journal, 12(3), 215-250. doi:10.1007/s10258-013-0093-z
Kahai, S. M. (2011). Traditional and non-traditional determinants of foreign direct investment in developing countries. Journal of Applied Business Research, 20(1), 43-50. Retrieved from http://www.cluteinstitute.com /ojs/index.php/JABR/article/view/2194
Kaur, M., & Sharma, R. (2013). Determinants of foreign direct investment in India: An empirical analysis. Decision, 40(1), 57-67. Retrieved from http://www.springer.com/business+%26+management/journal/40622
Kemeny, T. (2010). Does foreign direct investment drive technological upgrading?
World Development, 38(11), 1543-1554. doi:10.1016/j.worlddev.2010.03.001
Kerner, A., & Lawrence, J. (2014). What's the risk? Bilateral investment treaties, political risk and fixed capital accumulation. British Journal of Political Science, 44(1), 107-121. http://dx.doi.org/10.1017/S0007123412000725
Kok, R., & Ersoy B. A. (2009). Analyses of FDI determinants in developing countries. International Journal of Social Economics, 36(1), 105-123. http://www.emeraldinsight.com/doi/abs/10.1108/03068290910921226
Koojaroenprasit, S. (2013). Determinants of foreign direct investment in Australia. Australian Journal of Business and Management Research, 3(8), 20-30. Retrieved from http://www.ajbmr.com/
Kunle, A. M., Olowe, S. O., & Oluwafolakemi, F. O. (2014). Impact of foreign direct investment on Nigeria economic growth. International Journal of Academic Research in Business and Social Sciences, 4(8), 234-242. Retrieved from http://hrmars.com/index.php/pages/detail/IJARBSS
Kurtishi-Kastrati, S. (2013). Impact of FDI on economic growth: An overview of the main theories of FDI and empirical research. European Scientific Journal, 9(7), 56-77. Retrieved from http://eujournal.org/index.php/esj
Kwiatkowski, D., Phillips, P. C. B., Schmidt, P., & Shin, Y. (1992). Testing the null hypothesis of stationarity against the alternative of a unit root: How sure are we that economic time series have a unit root? Journal of Econometrics 54(1-3), 159-178. doi: 10.1016/0304-4076(92)90104-Y
Leshoro, T. L. A. (2014). The effects of foreign resource inflow and savings on the economic
growth of South Africa: A VAR analysis. Journal of Economics and Behavioral Studies,
6(3), 232-241. Retrieved from http://ifrnd.org/journal/index.php/JEBS
Li, C., Liu, H., & Jiang, Y. (2015). Exchange rate risk, political environment and Chinese outward FDI in emerging economies: A panel data analysis. Economics World, 3(5-6), 145-155. doi: 10.17265/2328-7144/2015.0506.004
Moksony, F. (1999). Small is beautiful: The use and interpretation of R2 in social research. Szociológiai Szemle, Special Issue, 130-138. Retrieved from http://www.szociologia.hu/a_folyoiratrol/
Mundell, R. A. (1957). International trade and factor mobility. The American Economic Review, 47(3), 321-335. Retrieved from https://www.aeaweb.org/journals/aer
Musonera, E., Nyamulinda, I. B., Karuranga, G. E. (2010) FDI fitness in Sub-Saharan Africa: The case of Eastern African community (EAC), Journal of International Business Research and Practice, 4, 1-18. Retrieved from http://www.aib-midwest.utoledo.edu/AIB_Midwest/about_the_journal.htm
Naanwaab, C., & Diarrassouba, M. (2016). Economic freedom, human capital, and foreign direct investment. The Journal of Developing Areas, 50(1), 407-424. Retrieved from http://muse.jhu.edu/journals/journal_of_developing_areas/
Niazi, G.S.K., Riaz, S., Naseem, M.A., & Rehman, R.U. (2011). Does an inflation and growth of a country affect its foreign direct investment? Journal of Management, Economics and Finance, 1(1), 84-90.
Ogasavara, M., & Masiero, G. (2013). Internationalization of Asian companies in Brazil: Factors and motivations. International Journal of Management, 30(3), 149-168. Retrieved from http://search.proquest.com.proxy1.ncu.edu /docview/1526676813?accountid=28180
Ojong, C. M., Arikpo, O. K., & Anthony, O. (2015). Determinants of foreign direct investment inflow to Nigeria. IOSR Journal of Humanities and Social Science, 20(8), 34-43. doi: 10.9790/0837-20863443
Okafor, G. (2015). Locational determinants of US outward FDI into Sub-Saharan Africa. Journal of Developing Areas, 49(1), 187-205. Retrieved from http://muse.jhu.edu/journals/journal_of_developing_areas/
Okurut, F. N., Narayana, N., & Chidozie, N. (2012). Determinants of foreign direct investment in Economic Community of West African States. International Journal of Economics and Business Studies, 2(1), 26-35. Retrieved from http://www.brownwalker.com/journal-info/09743456
Oladipo, S. O. (2010). Foreign direct investment (FDI): Determinants and growth effects in a small open economy. The International Journal of Business and Finance Research, 4(4), 75-88. Retrieved from http://www.theibfr.com/ijbfr.htm
Oladipo, S. O. (2013). Macroeconomic determinant of foreign direct investment in Nigeria (1985-2010): A GMM approach. Journal of Emerging Issues in Economics, Finance, and Banking, 2(4), 801-817. Retrieved from http://www.afajof.org/view/index.html
Omankhanlen, A. E. (2011). The effect of exchange rate and inflation on foreign direct investment and its relationship with economic growth in Nigeria. Economics and Applied Informatics, 1, 5-16. Retrieved from http://www.eia.feaa.ugal.ro/
Omodero, C. O., & M.C. Ekwe, M. C. (2017). Impact of foreign direct investment (FDI) on the stock market performances in Nigeria (1985-2014). Applied Finance and Accounting, 3(1), 36-48. http://redfame.com/journal/index.php/afa
Osbourne, J. W. (2002). Notes on the use of data transformation. Practical Assessment, Research & Evaluation, 8(6), 1-7. Retrieved from http://pareonline.net/
Osborne, J. W. (2008). Best practices in data transformation: The overlooked effect of minimum
values. In J. W. Osborne (Ed.), Best practices in quantitative methods (pp. 197-204). Thousand Oaks, CA: Sage Publishing.
Owusu-Antwi, G. (2012). Determinant of foreign direct investment: Is it a better prescription for economic growth in Africa? The International Business & Economics Research Journal, 11(7), 757-770. Retrieved from http://www.cluteinstitute.com/journals/international-business-economics-research-journal-iber/
Owusu-Antwi, G., Antwi, J., & Poku, P. K. (2013). Foreign direct investment: A journey to economic growth in Ghana - Empirical evidence. The International Business & Economics Research Journal, 12(5), 573-584. Retrieved from http://www.cluteinstitute.com/journals/international-business-economics-research-journal-iber/
Pavía -Miralles, J. M. (2010). A survey of methods to interpolate, distribute and
extrapolate time series. Journal of Service Science and Management, 3(4), 449-463.
doi:10.4236/jssm.2010.34051
Peiris, M. (2014). Testing the null hypothesis of zero serial correlation in short panel time series: a comparison of tail probabilities. Statistical Papers, 55(2), 513-523. http://dx.doi.org/10.1007/s00362-012-0495-5
Phillips, P.C.B., and P. Perron (1988). Testing for a unit root in time series regression.
Biometrika 75, 335.346. Retrieved from https://academic.oup.com/biomet
Quazi, R., Vemuri, V., & Soliman, M. (2014). Impact of corruption on foreign direct investment in Africa. International Business Research, 7(4), 1-10. Retrieved from http://www.ccsenet.org/journal/index.php/ibr
Rachdi, H., & Saidi, H. (2011). The impact of foreign direct investment and portfolio investment on economic growth in developing and developed economies. Interdisciplinary Journal of Research in Business 1 (6), 10-17. Retrieved from http://idjrb.com/
Reenu, S., & Kumar, A. (2015). Trends and determinants of foreign direct investment in India: A study of the post-liberalization period. South Asian Journal of Management, 22(3), 96-121. Retrieved from http://www.sajm-amdisa.org/
Saibu, M. O., & Akinbobola, T. O. (2014). Globalization, foreign direct investment and economic growth in Sub-Saharan africa. Journal of Economics and International Finance,6(3), 62-68. doi:http://dx.doi.org/10.5897/JEIF2013.0531
SAS. (2016). SAS/ETS 14.2 user’s guide. Cary, NC: SAS Institute Inc.
Seyoum, M., Wu, R., & Lin, J. (2014). Foreign direct investment and trade openness in Sub-Saharan economies: A panel data Granger causality analysis. South African Journal of Economics, 82(3), 402-421. doi:10.1111/saje.12022
Shahmoradi, B., & Baghbanyan, M. (2011). Determinants of foreign direct investment in developing countries: A panel data analysis. Asian Economic and Financial Review, 1(2), 49. Retrieved from http://www.aessweb.com/journals/5002
Shin, Y. (1994). A residual-based test of the null of cointegration against the alternative of no
cointegration. Econometric Theory, 10(1), 91-115. Retrieved from
https://www.cambridge.org/core/journals/econometric-theory
Siddiqui, H. A., & Aumeboonsuke, V. (2014). Role of interest rate in attracting the FDI: Study on ASEAN 5 economy. International Journal of Technical Research and Applications, 2(3), 59-70. Retrieved from http://www.ijtra.com/current_issue
Silvia, J. E., Iqbal, A., Bullard, S., Watt, S., & Swankoski, K. (2014). Economic and business forecasting: Analyzing and interpreting econometric results. Hoboken, NJ: Wiley.
Singhania, M., Gupta, A. (2011). Determinants of foreign direct investment in India. Journal of International Trade Law Policy 10(1), 64–82. Retrieved from http://www.emeraldgrouppublishing.com/products/journals/journals.htm?id=jitlp
Suliman, A., Elmawazini, K., & Shariff, M. Z. (2015). Exchange rates and foreign direct investment: Evidence for Sub-Saharan Africa. The Journal of Developing Areas, 49(2), 203-226. Retrieved from https://muse.jhu.edu/journal/258
Tripathi, V., Seth R., & Bhandari V. (2015). Foreign direct investment and macroeconomic factors: Evidence from the Indian economy. Asia-Pacific Journal of Management Research and Innovation, 11(1), 46-56. doi: 10.1177/2319510X14565041
Victor, A. A. (2013). Foreign direct investments and manufacturing sector performance in Nigeria, (1970-2009). Australian Journal of Business and Management Research, 3(4), 39-56. Retrieve from http://www.ajbmr.com/
Vijayakumar, N., Sridharan, P., & Rao, K. C. S. (2010). Determinants of FDI in BRICS countries: A panel analysis. International Journal of Business Science and Applied Management, 5(3), 1-13. Retrieved from http://www.business-and-management.org/
Wafure, O. G., & Nurudeen, A. (2010). Determinants of foreign direct investment in Nigeria: An empirical analysis. Global Journal of Human Social Science, 10(1), 26-34. Retrieved from http://globaljournals.us/index.php?option=com_content&view=article&id=89&Itemid=73
Wooldridge, J. M. (2016). Introductory econometrics: A modern approach (6th ed.). Boston, MA: Cengage Learning.
World Bank (2017). World development indicators. Washington, DC: Author. Retrieved from http://data.worldbank.org/data-catalog/world-development-indicators
Mansaray, M. A. (2017). Macroeconomic Determinants of Foreign Direct Investment Inflows and Impulse Response Function. International Journal of Academic Research in Business and Social Sciences, 7(10), 171-200.
Copyright: © 2017 The Author(s)
Published by Human Resource Management Academic Research Society (www.hrmars.com)
This article is published under the Creative Commons Attribution (CC BY 4.0) license. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this license may be seen at: http://creativecommons.org/licences/by/4.0/legalcode
