ECONOMIC FREEDOM AND FOREIGN DIRECT INVESTMENT IN ECOWAS COUNTRIES: A PANEL DATA ANALYSIS

The paper examines the relationship between economic freedom and the inflow of foreign direct investment (FDI) in twelve ECOWAS countries selected based on data availability over the period spanning 1995 to 2010. A panel data analysis was employed for the estimation in which preference was shown for fixed over random effects as suggested by the Hausman test. The study however, revealed the positive and significant impact of financial freedom on the inflow of FDI while business and property right freedoms constituted drags to FDI attraction among those countries. It is therefore recommended that unfettered business freedom should be prevented, flagrant abuses of copyrights, patent and franchise rights should be dully sanctioned and that a sound financial system environment should be promoted and consciously monitored to avert from being abused.