Domestic and foreign direct investment in Ghanaian agriculture

Abstract

Purpose – The purpose of this paper is to investigate the effects of foreign direct investment (FDI)into agriculture on domestic investment in agriculture.Design/methodology/approach – Time series data from 1976 to 2007 was fitted to a derived model.Findings – Foreign direct investment into agriculture crowd-in domestic investment into agriculture.Research limitations/implications – A targeted approach that will attract foreign direct investmentinto agriculture is required as to complement existing efforts at boosting domestic agriculturalinvestment.Originality/value – Numerous papers investigated the relationship between foreign direct investmentand domestic investment at the aggregate national and regional levels. However, the evidence for thisrelationship has been conflicting. That for agriculture is rare. For Ghana, a developing agrarian economythat has promoted foreign direct investment for some decades now, it is imperative to establish therelationship between foreign direct investments and domestic investment. Also, the estimation wasbased on a theoretically derived model.