Impact Of Foreign Direct Investment (FDI) On Economic Growth Of WAEMU From1980to2005

In recent years, the effect of Foreign Direct Investment (FDI) on economic growthhas been increasing in developing countries and particularl y in Africa. In their attemptto attract FDI, most African countries such as WAEMU（West African EconomicMonetary Union）countries have liberalized trade and attempted to create enablingenvironment. WAEMU countries took some steps towards liberalizing trade andmacroeconomic regime as well as introducing some measures aimed at improving theFDI regulatory framework.My thesis will investigate the impact of FDI on economic growth on WAEMU. Weexpanded a basic model from past literature as an extension to future research intoFDI inflows to developing countries. We estimate several fixed affects, randomeffects and dynamic panel models from1980-2005. The models include data fromseven developing countries originating from WAEMU.Our results show that FDI has a positive impact of economic growth. We foundthat Foreign Direct Investment in WAEMU is going to facilitate the trade and FDIliberalization and economic cooperation, to improve the business environment and toincrease the labor cost. We can conclude that FDI has a major impact on the economygrowth and the domestic capitals which is inadequate for purpose of economic growth.It allows WAEMU countries to attract more foreign capital for the creation jobs andwealth.