The Impact of Foreign Direct Investment on Local Enterprises in the Agroprocessing Industry of the Industry Sector of Ghana

Danquah Joseph Boakye Kokroko (2025) The Impact of Foreign Direct Investment on Local Enterprises in the Agroprocessing Industry of the Industry Sector of Ghana. Külkereskedelmi Kar.

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Absztrakt (kivonat)

The aim of this study is to examine the impact of Foreign Direct Investment (FDI) on local enterprises within Ghana’s agro-processing industry, a critical sub-sector of the broader industrial sector. The agro-processing industry plays significant roles within any economy ranging from value addition of agricultural produce to employment generation, and economic diversification. In recent years, Ghana has experienced a notable increase in FDI inflows, specifically within agriculture and manufacturing. While FDI is often portrayed an important factor or economic growth through fostering technology transfer, employment, and productivity improvements, its actual effect on Ghana’s local enterprise, particularly small and medium-sized agro-processor remains unclear and under-researched. Using both quantitative and qualitative approaches, this study explores whether FDI positively or negatively influences the performance and sustainability of local agro-processing firms. Primary data was collected through structured surveys distributed to 102 agro-processing businesses across various regions of Ghana. The survey captured data on firm size, employment, production activities, and annual revenues. In addition, secondary macroeconomic data on GDP, Consumer Price Index (CPI), and exchange rates were integrated to provide context for regression analysis. Descriptive statistics showed that the majority of local agro-processing firms operate on a small scale, with limited employee capacity and annual revenues under GHC 100,000. Regression analysis was employed to assess the relationship between FDI and manufacturing performance (MANU), while controlling inflation (CPI) and exchange rate fluctuations. The results reveal a statistically significant negative effect of FDI on manufacturing activity (β = -0.318, p = 0.004), suggesting that increased FDI may exert competitive pressure on local enterprises, possibly crowding them out or reducing their market share. Conversely, FDI showed positive correlations with GDP and exchange rate movements, reflecting its macroeconomic importance. The findings challenge the assumption that FDI is universally beneficial and highlight the need for policies that protect and empower local agro-processors. This includes creating inclusive investment frameworks, enhancing the capacity of domestic firms to compete, and ensuring technology and knowledge transfer from foreign to local enterprises. In conclusion, while FDI contributes to macroeconomic indicators such as GDP and foreign exchange stability, its impact on local agro-processing businesses may be adverse if not properly regulated. The study recommends targeted government interventions to ensure that FDI complements rather than competes with local enterprise growth. These findings contribute to policy debates on sustainable industrial development and provide a basis for balancing foreign investment attraction with local enterprise empowerment.

Intézmény

Budapesti Gazdasági Egyetem

Kar

Külkereskedelmi Kar

Tanszék

Nemzetközi Gazdaságtan Tanszék

Tudományterület/tudományág

NEM RÉSZLETEZETT

Szak

Nemzetközi gazdaság és gazdálkodás (angol)

Mű típusa:	diplomadolgozat (NEM RÉSZLETEZETT)
Kulcsszavak:	agriculture, agro processing, fdi, Ghana, külföldi működőtőke beruházás, mezőgazdaság
SWORD Depositor:	User Archive
Felhasználói azonosító szám (ID):	User Archive
Rekord készítés dátuma:	2025. Okt. 27. 14:23
Utolsó módosítás:	2025. Okt. 27. 14:23

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