The Impact of Institutional Quality on Foreign Direct Investment in Burkina Faso

Zakaya RAMDE

Statistician engineer, Macroeconomist, Chamber of commerce and industry of Burkina Faso

Abstract:

This study examined the impact of institutional quality on the attraction of foreign direct investment in Burkina Faso over the period 1985-2005.

Different analyzes on variables allowed use of error correction modeling (VECM). The results reveal a long-term relationship between foreign direct investment (FDI), corruption, external conflicts and socio-economic conditions. They show that corruption and external conflicts are determinants of the attractiveness of FDIin the country.

Therefore, there is a need to develop appropriate policies such as strengthening judicial governance and improving existing anti-corruption strategies in Burkina Faso. The country must also be involved in the appropriate way of resolution of external conflicts that keep potential investors away, especially in the West African sub region.

Keywords: Institutional quality – Foreign direct investment – VECM – Burkina Faso.

Pages: 153 – 162 | Full PDF Paper