Dynamic Stochastic Panel Analysis of FDI Inflows, Employment Generation And Poverty Reduction In Some Selected Ecowas Countries

Abstract

Background and aim: over the years, FDI has been positively and significantly contributing towards economic growth and development through job opportunities and technological transfer in many developing nations. However, a persistent decline in FDI inflows to ECOWAS over the last decade has created an investment deficit for employment-enhancing initiatives. In the light of this, dynamic stochastic interaction among FDI inflows, employment generation and poverty reduction in ECOWAS sub region was examined. Scope: The data used in this study spanning from 1990 to 2021. Methods: this study utilizes impulse response and variance decomposition. Results: findings in this study show a high linkage among FDI, employment and reduction of poverty exists in the study, which implies a significant role of FDI in generating employment and consequently reducing poverty ECOWAS. Conclusions: it is worth noting that policy shocks to FDI, employment generation poverty reduction in ECOWAS sub region do not respond with an immediate actions in the best direction. Originality: the use of impulse response and variance decomposition in estimating the goals of this study. Practical implications: policy makers should as a matter of necessity consider the time lag it involves in order to ensure appropriateness in the timing of policies when employment generation and poverty reduction are the goals of the policymakers.