@article{Udo:331519,
      recid = {331519},
      author = {Udo, Eli A. and Obiora, Isitua K.},
      title = {Determinants of Foreign Direct Investment and Economic  Growth in the West African Monetary Zone: A System  Equations Approach},
      address = {2006},
      pages = {32},
      year = {2006},
      note = {Presented at the 9th Annual Conference on Global Economic  Analysis, Addis Ababa, Ethiopia},
      abstract = {Although the theory of diminishing returns to capital  postulates that capital should be invested where its ratio  to other production factors is low, evidence on the flow of  Foreign Direct Investment (FDI) speaks to the contrary.  Slightly more than 70 percent of world FDI in the past 20  years has gone to developed countries, where capital/labour  ratio is much higher than in the developing countries.  Although the literature on the FDIgrowth nexus is  burgeoning, this paper departs from earlier studies by  specifically analyzing the candidate determinants of FDI in  the West African Monetary Zone (WAMZ) and investigating the  cause-effect relationship between FDI and growth. Using a  simultaneous-equations method on a panel of WAMZ countries  over the period 1980 to 2002, we find no evidence of a  two-way causal relationship between FDI flows and economic  growth. Rather FDI tends to be attracted by high per capita  income, better infrastructure and political stability.  Hence, any meaningful attempts at attracting FDI must take  cognizance of these determinants.},
      url = {http://ageconsearch.umn.edu/record/331519},
}