As already established, and in a bid to validate the Bhagwati hypothesis withinthe context of the Ghanaian economy, the interaction term of FDI and tradeopenness was incorporated into the models under consideration. This is crucialbecause, as indicated, the growth-enhancing impact of FDI is highly dependent onthe nature of the trade policy regime in the recipient country (Kohpaiboon, 2003).Amongst the results of the interaction terms considered, only that of the interactionbetween FDI and exports was found to be positive and statistically significant,this being the term that has the highest impact on long-run economic growth inGhana. This implies that only FDI and exports complement each other in stimulatinglong-run economic growth in Ghana, thus reflecting the rather impressiveintegration of trade (i.e., exports) into FDI initiatives into the economy as discussedin section 1.
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