Greenfield investment and job creation in Ghana: a sectorial analysis and geopolitical implications of Chinese investments

What is it about?

Using Ghana as a case study, this paper examines the impact of Greenfield investment on job creation. Proponents of multinational corporations (MNCs) argue that foreign direct investment (FDI) leads to economic growth, creates technological spillover, increases exports, and creates jobs, among other benefits. This has encouraged developing economies to adopt developmental strategies around MNC activities

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Why is it important?

Does greenfield investment in Ghana lead to significant job creation in the formal sector? Extant literature considers FDI monolithic, without adequately differentiating between Green and Brownfield investments. Using granular data from the FDI Markets, this research paper fills this gap by empirically analyzing the Greenfield investment by 386 multinational companies in Ghana from 2003 to September 2020. Over the specified year range, these companies engaged in 500 projects across Ghana. Adopting the ordinary least square analysis (OLS), the study demonstrates that Greenfield investment has a statistically significant and positive impact on job creation in Ghana