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Effects of globalization on the manufacturing sector of Ghana

Author: 
Yaw Frimpong OFORI ATTA
Subject Area: 
Social Sciences and Humanities
Abstract: 

Interesting trends observed in the impact of globalization on certain sectors of an economy have attracted studies on the subject of globalization. This study centred on effects of globalization on the manufacturing sector of Ghana having used FDI as a proxy for globalization. The study employed the simple ordinary least squares (OLS) regression and the empirical analysis was conducted using data between 1985 and 2013. It was found that the independent variable ‘MANGH’ was significant to explain the dependent variable FDI whose influence was negative. This indicated that, there was a negative correlation between FDI and manufacturing in Ghana. The negative effect which emanated from trade, financial sector and exchange rate liberalization, is materialized through stiffer competition, increased cost of production, and loss of confidence by indigenous investors. The study recommended among others that the government of Ghana must revisit policies relating to FDI and trade liberalization in order to salvage the manufacturing sector.

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