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Published: 2022-02-28

Page: 425-440


Faculty of Law, Governance & International Relations, Kings University College, Accra, Ghana.

*Author to whom correspondence should be addressed.


As the debate on the roles of countries’ institutional variables in attracting foreign direct investment to host countries rages, this parametric study investigates the impacts of law, politics, economics, and human capital on foreign direct investment inflow to Ghana using aggregate country-wise secondary data from 2003 – 2019 (17 years). Locational-institutional theory guides the study. Based on reviewed literature, the quality of politics was measured with corruption perception index; quality of economic decisions was measured with gross domestic product; human capital development was measured with quality of social life; quality of law was measured with rule of law index; and foreign direct investment was measured with foreign direct investment inflow. Using ordinary least square (OLS) multiple regression analysis, the study establishes that law, politics, economics, and human capital have significant positive associations as well as effects on foreign direct investment inflow to Ghana within the period under review. The findings of the work confirmed the relevance of locational-institutional theoretical framework in investigating the inflow of foreign direct investments to host countries (especially Ghana in West Africa). The study also exposes the need Ghana to improve the quality of its national institutions and economic policies in order to maximum foreign direct investment inflow. In line with the objectives and findings of the work, far-reaching recommendations were put forward.

Keywords: Economics, Foreign direct investment, human capital, law, location, institutional theory

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