The Determinant of Economic Growth Evidence from Benin: Time Series Analysis from 1970 to 2017

Abstract

Financial development is part of the private sector development strategy to stimulate economic growth and reduce poverty. So, the paper attempts to find out the determinant of economy growth and the explanatory variables, such as, the foreign direct investment, government expenditure, consumer price index and trade openness in Benin. Using time series as the econometric model and the data during 1970 and 2017 for the study. In addition, the technique that implemented to estimate the model was Ordinary Least Square. The result showed that the foreign direct investment and consumer index price have significantly and positively impact the Benin's economy growth but the trade openness and the government expenditure have significantly and negatively impacted the Benin's economy growth. I suggest that the government must invest more in infrastructure to attract more foreign direct investment. In term of trade Benin's policymaker should promote the local products and export to the world to adjust the balance between the import and export.