Foreign direct investment and exchange rate movement effects of agricultural growth: evidence from Cameroon (1978-2014)

This study analysed the effects of foreign direct investment (FDI) and exchange rate movement on agricultural growth in Cameroon (1978-2014). The results revealed that in the long run, a unit increase in foreign direct investment (FDI) in the previous year led to increase in agricultural growth by 0.15 while a unit increase of exchange rate in the previous year led to decrease in agricultural growth by 1.18. There was bidirectional causality between exchange rate and agricultural growth. The results further revealed that exchange rate (EX) accounted for more 10.06% in the short run, to agricultural growth while foreign direct investment (FDI) accounted the more 24.71% in the long run to agricultural growth. The results also revealed that a unit shock of foreign direct investment (FDI) accounted for a negative response of agricultural growth (AGR) (-0.023) and (-0.025) in the short and long run respectively while a unit shock of exchange rate (EX) accounted for a positive response of agricultural growth (AGR) (0.025) and (0.023) in the short and long run respectively. It was recommended that policy should be directed towards the implementation of a favourable exchange rate that will attract foreign investors in order to sustain the growth of agriculture.


Issue Date:
Oct 01 2017
Publication Type:
Journal Article
Record Identifier:
http://ageconsearch.umn.edu/record/268447
ISSN:
0794-4748
Language:
English
Published in:
Nigerian Journal of Agricultural Economics, Volume 07, Number 1
Page range:
16-24




 Record created 2018-02-15, last modified 2018-04-02

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