FDI and Economic Growth in Côte d’Ivoire: An Empirical Analysis Based on the Service Sector

This paper analyzes the contribution of FDI to service sector growth in Côte d’Ivoire over the period 1980-2021. The data are extracted from World Development Indicators (World Bank). The econometric test based on the ARDL cointegration approach is used. The results show that FDI has a negative and significant effect on growth in the service sector. These results could be explained by the insufficiency of inward FDI in Côte d’Ivoire in recent years, compared to other sub-Saharan African countries, by the sectoral allocation of inward FDI, which does not take into account the growth sector of the economy, and finally, by the unbalanced geographical distribution of FDI, most of which is heavily concentrated in Abidjan. Our results highlight the importance of boosting investment in the service sector, in order to stimulate activities in this sector in Côte d’Ivoire. Besides aiming at creating a solid national economy and improving living standards, we suggest the mobilization of sufficient domestic savings and raising the level of education, developing infrastructure in sufficient quantity and quality and increasing internal and external trade flows, and finally, preserving the population’s purchasing power. We have also proposed measures to improve FDI to promote economic growth in Côte d’Ivoire’s service sector.


Introduction
Achieving the Sustainable Development Goals (SDGs) requires a significant increase in investment (Fiedler, 2020).According to CNUCED (2014), developing countries face an annual investment gap of around 2.5 trillion USD.So, it is particularly urgent to increase investment in sectors that eradicate poverty and hunger and promote growth.In Côte d'Ivoire, the service sector plays a central role in the country's economic and social development.With a share in 1960 of 39% of GDP versus 47.9% and 13.1% for the agricultural and industrial sectors respectively, by 2022 the service sector had contributed 53.7% of the country's GDP versus 16.7% and 22% for the agricultural and industrial sectors respectively (WDI, 2023).Indeed, according to the Banque Mondiale (2019), since the 1980s, the service sector has been modernizing (communications, transport, finance, etc.) and its share of GDP exceeds that of the other two sectors.
Until 2000, the presence of multinational firms carrying foreign direct investment (FDI) was strongest in the service sector.They are mainly to be found in information and communication technologies (ICT), mobile telephony, banking, finance, tourism, hotels, etc. Between 2000 and 2003, the services sector absorbed around 80% of FDI flows into Côte d'Ivoire, before dropping to 75% in 2006.Over this period, telecommunication services accounted for 79% in 2002, and real estate for 23% in 2003 (BCEAO, 2007).According to CNUCED (2019), the sectoral breakdown of net inward FDI flows to Côte d'Ivoire in 2017 (in percentage terms), shows that 39.2% went to the extractive industries, 27.8% to financial intermediaries, 13.7% to telecommunications, 8% to manufacturing industries, 5.3% to hotels and 4.1% to transport.The services sector accounted for more than half of the country's net FDI inflows, i.e., 50.9%.new investment code in 2018 led to an increase in the volume of FDI destined for Côte d'Ivoire from 620.33 million USD in 2018 to 1008.70 million USD in 2019, an increase of 62%.Investments are highest in the agro-industrial sector (27%) and in transport and warehousing (24%).The hotel-restaurant and plastics industries account for 3% and 4% of investments respectively (CAPEC, 2021).Also according to CAPEC (2021), in the first quarter of 2020, cumulative investments stemming from the 2018 code were mainly directed towards agro-industry (103.7 billion franc CFA), energy (76 billion franc CFA), transport and warehousing (65.3 billion franc CFA), BTP services (44.9 billion franc CFA), food industry (32.5 billion franc CFA), hotels and restaurants (21.9 billion franc CFA), glass and ceramics (12 billion franc CFA), cosmetics and hygiene (6.8 billion franc CFA), services (6.6 billion franc CFA) and New Information and Communication Technologies (NICT) (6.05 billion franc CFA).The services sector still records far more net FDI inflows into the country, with a cumulative total of 144.75 billion franc CFA.Since the 2000s, Côte d'Ivoire's service sector has been recording a higher FDI inflows than other sectors.According to a report of BCEAO (2022), this trend continued in 2022 for all UEMOA countries.The question that needs to be asked is whether this massive inflow of FDI into Côte d'Ivoire's services sector has contributed directly to its growth?Among foreign private capital, FDI is sought for its stability and its ability to promote economic growth in the sector of activity where it is financed (Azeroual, 2016).While some authors (e.g.Esso, 2005;Bouoiyour et al., 2009;Eka & Bouoiyour, 2020;Miah & Majumder, 2022) argue that FDI generally promotes economic growth in host countries, others stress that FDI does not explain a country's economic growth in the same way (see, for example, Koté et al., 2015;Azeroual, 2016).The provenance (origin) and destination (the sectors of activity to which they are directed) of FDI better explain its effect on growth (Nkoa, 2018).
Unlike other papers that have analyzed the effect of FDI on the country's economic growth in aggregate terms, our study breaks down economic growth by sector of activity and analyzes the contribution of FDI to growth in the service sector in Côte d'Ivoire.Although there is a wealth of literature on the FDI-growth relationship, studies focusing exclusively on the contribution of FDI to service sector growth in Côte d'Ivoire, have not been sufficiently addressed.
The aim of this paper is to investigate empirically the nature of the relationship between service sector growth and FDI in Côte d'Ivoire.For us the point is to better appreciate the massive contribution of FDI to the growth of the service sector.Does massive FDI inflows into Côte d'Ivoire's service sector contribute directly to its growth?To address this concern, we use an econometric ARDL cointegration approach to analyze the relationship between FDI inflows and service sector growth over the period 1980-2021.We also include other variables such as trade openness, education, savings, inflation and infrastructure.Our results show that, in both the short and long term, FDI negatively and significantly affects the growth of the country's service sector.There could be three main reasons for these results: the insufficiency of inward FDI in Côte d'Ivoire in recent years, compared with other sub-Saharan African countries, the sectoral allocation of FDI inflows in the country which does not take into account sectors with a higher growth potential, and the unbalanced geographical distribution of FDI in the country which is heavily concentrated in Abidjan.Our results thus highlight the importance of boosting investment in the service sector, in order to boost activities in this sector.In order to create a solid national economy and improve living standards, we suggest the mobilization of sufficient domestic savings, raising the level of education, developing infrastructure in sufficient quantity and quality, increasing internal and external trade flows, and preserving the population's purchasing power.
The rest of this paper is organized as follows: the Section 2 presents a review of the literature on the subject, Section 3 discusses the methodological framework, Section 4 presents our empirical results and Section 5 discusses and concludes the findings.

Some Theoretical Arguments
According to economic theory, FDI can be a catalyst for growth; the inflow of capital can boost production and hence growth (Solow, 1956;Bende-Nabende & Ford, 1998).Foreign capital flows, especially in developing countries (DCs) where domestic savings remain insufficient, make it possible to fill the existing financial gap and develop the host country's financial market (King & Levine, 1993;Ajayi, 2004) and contribute to the accumulation of capital stock (Thompson, 2008;Makiela & Ouattara, 2018).They also help to develop the host country's financial market by improving the efficiency of local financial institutions, thanks to the presence of foreign banks mastering modern credit allocation and risk control techniques (Bellocq & Zlotowski, 2011).Foreign private capital, particularly FDI, is one of the main ways in which developing countries gain access to new technologies, increase demand for workers and contribute to the accumulation of skilled labor and innovation (Mainguy, 2004;Aghion et al., 2016).They contribute to the transmission of innovation best practices to local companies and numerous positive externalities (Romer, 1990;De Mello, 1997;Borenzstein et al., 1998;Bouoiyour & Toufik, 2007).

Controversial Empirical Evidence
Although there seems to be a theoretical consensus regarding the positive effect of FDI on economic growth, empirical studies that have attempted to verify this positive effect are generally inconclusive.The positive effect of FDI on economic growth is controversial.For example, several authors confirm that FDI has a positive and significant effect on economic growth (Nelson & Phelps, 1966), acts positively on growth through a diffusion effect of technological innovations (Brana, 1999), stimulates growth by increasing savings and investment and contributing to industrialization (Nkoa, 2016;Eka & Bouoiyour, 2020).FDI positively and significantly affects domestic investment, education, labor and energy consumption (Majumder, 2019), job creation, productivity improvement and export volume growth (Miah & Majumder, 2022;Majumder et al., 2022).Others, on the contrary, argue that FDI inflows have negative effects on the performance of production units and on growth (See, Caceres, 1995;Akinlo, 2004;Artus & Cartapanis, 2008;Bouoiyour et al., 2009;Alege & Ogundipe, 2014;Carbonell & Werner, 2018;Ekodo et al., 2020;Iritié & Tié mé lé , 2023).For example, studies by Caceres (1995) in four Central American countries (Costa Rica, Guatemala, Honduras and Salvador) over the period [1971][1972][1973][1974][1975][1976][1977][1978][1979][1980][1981][1982][1983][1984][1985] show that external resources generate financial instabilities that can have a negative effect on growth.A further study carried out in Nigeria by Akinlo (2004) also showed, using an Error Correction Model, that FDI in the extractive and manufacturing sectors did not improve the level of economic growth or the well-being of the country's poor over the period 1970-2001.The work of Artus and Cartapanis (2008) shows that high international capital mobility deprives the economy of any possibility of stabilizing production.For these authors, transfers of external savings can exacerbate macroeconomic dilemmas and induce dynamic instability likely to induce adjustment and slow growth.Similarly, Bouoiyour et al. (2009) using panel data from 63 countries in the Middle East and North Africa over the period 1960-2004, showed that FDI has no impact on productivity and growth in these countries.Alege and Ogundipe (2014) studied the relationship between FDI and growth in ECOWAS using the system generalized method of moments on a panel over the period 1970-2011 and found a non-significant contribution of FDI on growth.Carbonell and Werner (2018) have also verified the effect of FDI on growth in Spain.They observed that over the period 1984-2010, although FDI increased significantly in Spain, it did not stimulate the country's growth.Using the GMM dynamic panel method to analyze the effect of FDI on growth in the countries of the Central African Economic and Monetary Community (CAEMC) over the period 1996-2018, Ekodo et al. (2020) ) show that FDI, even when combined with corruption control, has no significant effect on economic growth in the zone.In a recent study, Iritié & Tié mé lé (2023) use an ARDL and cointegration approach and show that in both the short and long-run, FDI has a negative impact on economic growth in Côte d'Ivoire over the period 1980-2019.

Statistics and Data Analysis
The variables used in this study are macroeconomic data from World Development Indicators (World Bank), covering the period 1980-2021.Data processing is implemented with EVIEWS 9.0 software.
The dependent variable is the value added in services as a percentage of GDP.It is denoted (SVAD) and represents growth in the service sector.With a share of 39% of GDP versus 47.9% for the agricultural sector in 1960, the Ivorian service sector has been growing at a much faster rate than the industrial and agricultural sectors in recent years.In 2022, despite a slight decline, its share of GDP will be 53.7%,compared with 22% for the industrial sector and 16.7% for the agricultural sector (WDI, 2023).
We use six explanatory variables.The variable of interest is the flow of foreign direct investment (FDI), net inflows as a percentage of GDP.We use FDI flow because of the lack of time-series data on FDI in the service sector.The other explanatory variables, which are control variables are domestic savings (SAVE), trade openness (TO), education (EDUC), inflation (INFL) and infrastructure (INFR).The choice of these variables stems from the economic literature and are determinants of economic growth.
The gross domestic savings are calculated as a percentage of GDP.According to economic theory, the financing of healthy and sustainable economic growth, depends on the mobilization of substantial domestic savings (Aglietta, 1991).The trade openness is calculated as the sum of exports and imports of goods and services, relative to GDP.Note that according some authors such as Anyanwu (2011), Mohamed and Yassine (2021), Levine and Renelt (1992), Frankel and Romer (1999), the trade openness is the main determinant of FDI.It increases imports of goods and services and drives economic growth.The education variable is measured by secondary education attainment as a percentage.It indicates the level and quality of human capital in the country's growth process.Indeed, a high level and better quality of human capital, increases the country's capacity to absorb new technologies and reduces the cost of imitating ideas discovered elsewhere (Nelson & Phelps, 1966).The inflation variable is measured by the consumer price index as an annual percentage.In the economic literature, inflation volatility negatively influences the rate of economic growth (See, Bruno & Musso, 2000).It is used here as a macroeconomic stability variable.Finally, the proxy for the infrastructure variable, is the number of telephone lines connected to a public network per 100 inhabitants.It represents the telecommunications infrastructure that facilitates the transmission of information.Several theoretical and empirical studies agree that adequate infrastructure attracts foreign capital and promotes economic growth (See for example, Barro, 1990;Kinda, 2008).
The descriptions of the variable and the summary statistics are reported in Tables 1 and 2 respectively.We note that Education variable is the most volatile in terms of standard deviation.It is followed by trade openness variable.The infrastructure variable is the least dispersed.

Econometric Model
The aim of our study is to assess the contribution of FDI to growth in the services sector in Côte d'Ivoire.The general model to be estimated is as follows: (1) 1980, 1981, 1982, … , 2021, for a period of 42 years; e t is the error term,   ∽ (0, ).

Unit Root Test
To analyze the stationarity of our series, we use the classic Augmented Dickey-Fuller (ADF) (1981) and Philipps-Perron (PP) (1988) tests.We also use the Zivot and Andrews (ZA) (1992) unit root test to capture breaks between series.Indeed, ZA's test proposes a unit root test with an endogenous break.The three models adopted by Zivot and Andrews (1992) to test the hypothesis of a single structural break in the series are as follows: 1 1 In the above equations, the dummy variable is represented by   showing the change in mean occurring at each breakpoint in time, while the trend change variables are represented by   .Thus, The null hypothesis of the unit root break date is 0 c  , indicating that the series is non-stationary with a derivative having no information on the structural breakpoint while the hypothesis 0 c implies that the variable turns out to be trend-stationary with an unknown time break.The unit root test of Zivot and Andrews (1992) fixes all points as potential for a possible temporal break and estimates by regression for all possible break points successively.Then, this unit root test selects this temporal break, which reduces the one-sided t-statistic to test (=  − 1) = 1.For Zivot and Andrews (1992), in the presence of endpoints, the asymptotic distribution of the statistic diverges towards the infinity point.It is necessary to choose a region where the sample's end points are excluded.

ARDL Cointegration Test
As far as cointegration tests are concerned, the most commonly used methods are the Engel and Granger test (1987) and the Johansen test (1988), which only apply to variables integrated at the same order.The inability of these traditional tests to apply to series integrated at different orders prompted Pesaran and Shin (1995) and Pesaran et al. (2001) to propose a cointegration test procedure called the ARDL bound test.The ARDL cointegration approach is applicable regardless of whether the variables are I(0), or I(1) as in the present study (see results in Tables 4 and 5).It is an unbiased and efficient cointegration technique that gives good results in small samples, and is applied on the basis of an ARDL cointegration specification (Narayan, 2004).The limit testing procedure assumes the existence of long-term equilibrium relationships.These relationships can be combined with short-term series dynamics in a dynamic unrestricted error correction model (UECM), which takes the following form: With the first difference operator,   the dependent variable whose dynamics are being explained,  0 the intercept;  1 is the coefficient associated with the lagged dependent variable.X is a vector of regressors and A an associated parameter vector.  is the vector of parameters associated with  − ; is the parameters associated with  − ; is the error term.Once formulation ( 5) is applied to equation (1) to be estimated, we obtain the cointegrated dynamic ARDL (m, n, p, q, r, s, t) model as shown in equation ( 6) below: Where  0 is the constant term.2001) cointegration test.First, we determine the optimal lag.To do this, we select the optimal ARDL model, the model that offers statistically significant results with the least parameters and has the smallest SIC value.Secondly, the Fisher test is used to verify the cointegration relationship between the series.The calculated value of Fisher's F statistic is compared with the critical values forming the upper bound (UB) and lower bound (LB) provided by Pesaran et al. (2001).If the F statistic is greater than the UB, the cointegration exists.There is no cointegration if the F-statistic is below the LB.If the F-statistic lies between the two bounds, the test is inconclusive.
Once long-term cointegration is verified, the error correction term should be examined as specified in equation 7 below: where ECTt-1 is the error correction term; γ is the adjustment coefficient which measures the speed at which the variables return to the long-term equilibrium relationship.It must be negative and statistically significant for the correction mechanism to take place.

Diagnostic Tests of the ARDL Model
To validate an ARDL model, the most important tests are the Jarque-Bera normality test, the Breusch-Godfrey autocorrelation test, the White and ARCH heteroskedasticity tests and the Ramsey specification error test.Finally, to test coefficient stability, we use the Cumulative Sum (CUSUM) and Cumulative Sum of Squares (CUSUMSQ) proposed by Brown et al. (1975).

Correlation Test Results
Table 3 shows the results of the correlation matrix.The results show that there is no multi-colinearity between the variables.Indeed, the problem of multi-colinearity may arise when some variables in the prediction model are correlated with others.Table 3 shows no strong link between the explanatory variables, with degrees of association not exceeding 0.80.In addition, the calculation of variance inflation factors (VIFs), proposed by Theil (1971) shows all values below 5 meaning that there is no multi-colinearity.

Estimation Results
The results of the short and the long-run estimations are shown in Table 7 below.The value associated with the adjustment coefficient is negative (-3.2357) and significant at the 1% level.So, there is an error-correction mechanism.Our estimations show that, in both the short and long run, FDI has a negative and significant impact on growth in the country's service sector at the 1% threshold.A 1% increase in FDI inflows leads to a 7.20% reduction in service sector growth in the short term, and an 8.00% reduction in the long term.There are several possible reasons for this result.Aside from insufficient FDI flows into the country, let's also note that Côte d'Ivoire has the weakest performance in terms of FDI attraction, although it has kept pace with Ghana in terms of volume and progress over the decade.Indeed, between 2005 and 2019, FDI volumes multiplied by 16.0 points for Ghana versus 11.5 for Cameroon, 5.9 for Senegal and 2.9 for Côte d'Ivoire.This result is also in line with the findings of Iritié & Tié mé lé (2023).
The volume of inward FDI in Côte d'Ivoire is therefore certainly not sufficient to boost its overall economic growth, let alone that of the service sector.Our results can also be explained by the fact that the sectoral allocation of inward FDI in the country does not take into account the growth-generating sector of the economy.
According to the Ministè re du plan et du dé veloppement (2020), beyond the low volume of FDI, we note that its sectoral allocation is unfavorable to growth-generating sectors of activity when we know that in Côte d'Ivoire, the agricultural sector employs 46% of the country's working population and is a source of income for 2/3 of a population that is 50.3% rural (Banque Mondiale, 2019).For the Ministry of Planning and Development, insufficient FDI certainly explains the low level of investment in the country, but its sectoral allocation is an obstacle to its effectiveness.
Finally, our results could be explained by the unbalanced geographical distribution of FDI in the country.FDI remains heavily concentrated in Abidjan the main place of economic activities, where 90% of formal businesses and jobs are located (Banque Mondiale, 2019).A more balanced geographical distribution of FDI across the territory could foster more inclusive and sustainable growth in the services sector.The results of Alfaro (2003) confirm our findings and show that FDI, unlike the industrial sector, does not appear to have a strong economic impact in the energy, agriculture services sectors.Similarly, Aykut & Sayek (2007) find an identical result by studying the effect of FDI on GDP growth in industry, agriculture and services in 37 developing countries over the period 1990-2002.
The SAVE variable, representing domestic savings, contributes to the growth of the services sector in both the short and long-run.It is therefore important for Côte d'Ivoire set up mechanisms enabling the country to mobilize sufficient domestic savings to soundly finance the growth of its service sector.Savings play a very important role in any development process, whether urban or rural (Abdelkhalek et al., 2012), and the financing of healthy, sustainable economic growth depends on the mobilization of substantial domestic savings (Aglietta, 1991).
Trade openness has a positive and significant effect on services growth in the short term at the 1% threshold.In the long-run, its effect is negative and significant at the 5% threshold.This means that in the short-run, the country has been able to benefit from the know-how of other nations.But, in the long-run, the negative relationship between foreign trade and the service sector means that foreign trade plays a negligible role in the country's services sector.This result could be explained by the fact that, unlike emerging countries, Côte d'Ivoire's exports are essentially based on agricultural raw materials, in addition to refined petroleum products.The manufacturing sector is relatively weak in sustaining foreign trade, this is not the case in emerging countries where a significant proportion of exports involve manufacturing products and services (CAPEC, 2014).
As for education, its contribution to services growth is negative and significant in the short-run, at the 1% threshold.However, in the long-run, its contribution is significantly positive, at the 1% threshold.In the short-run, the country did not benefit from the know-how and increased level of human capital on the growth of the service sector, due to the fact that during this short period, the level of qualification of the population was not sufficient to capture new technologies.In the long-run, as the service sector requires a highly skilled workforce, increasing the level of human capital has been beneficial for the growth of this sector.Increasing the level of human capital has a positive impact on improving the quality of labor factors, on workers' productive capacities and on the well-being of populations in Côte d'Ivoire (Koné , 2016).
The last two variables, inflation and infrastructure, make a significant negative contribution to long-run growth in services at the 1% threshold.As far as inflation is concerned, this result could be explained by the high level of inflation in recent years in WAEMU countries, linked to the rise in prices of food, transport and housing products and services, the drop in cereal production in the 2019/2020 season and the disruption to distribution channels caused by the Covid-19 pandemic (BCEAO, 2022).The overall year-on-year inflation rate stood at 8.4% in October 2022, a slight acceleration on its September 2022 level, when prices had risen by 8.3% (FMI, 2022).
In terms of infrastructure, the result could be explained by the low level of structural infrastructure endowment of the country (BAD, 2018).

Model Diagnostic Test Results
In Table 8 below, we summarize the tests that validate the estimated ARDL model.

Discussion
This paper analyzed the contribution of FDI to Côte d'Ivoire's service sector growth using an ARDL cointegration approach.FDI attracted by Côte d'Ivoire did not contribute positively to the growth of its services sector over the period 1980-2021.It had a negative effect on the growth of the service sector in both the short and the long-run.As far as we are concerned, there are three main reasons for these results.Firstly, there has been insufficient FDI inflows to Côte d'Ivoire in recent years compared with other sub-Saharan African countries.Although evolutions show an upward trend in FDI in the various countries of sub-Saharan Africa, the level of FDI inflows in Côte d'Ivoire remains low, both in absolute and relative terms, and the country has the weakest performance in terms of FDI attraction.Whereas over the period 2005-2019, FDI volumes multiplied by 16.0 points for Ghana, 11.5 for Cameroon and 5.9 for Senegal, in Côte d'Ivoire they were at 2.9 points (CAPEC, 2021).
Secondly, the sectoral allocation of inward FDI in the country, which does not take into account the growth-generating sector of the economy, would also explain their negative effect on growth in the services sector.The agricultural sector, bedrock of the Ivorian economy and a driving force behind its growth, although since the 1980s its share of the country's GDP relative to other sectors of activity has declined (Banque Mondiale, 2019), is insufficiently financed (FAO, 2015), whereas we note that a large proportion of FDI goes into the services sector (See table 9 in Appendix A; BCEAO, 2007;CNUCED, 2019).Finally, the unbalanced geographical distribution of FDI in the country, most of which is heavily concentrated in Abidjan, is not conducive to more inclusive and sustainable growth in the services sector.
To correct these observations, we would firstly suggest that the government of Côte d'Ivoire seek to improve the existing investment promotion system in order to increase the volume of foreign investment in the country.
Secondly, the Ivorian government must increase the size of the local market, notably by raising the level of real income.This involves improving the skill level of the workforce, developing the service sector, ensuring political and economic stability, and liberalizing trade policies.Finally, a more balanced geographical distribution of FDI in the country could foster more inclusive and sustainable growth in the services sector.
Furthermore, one of the important findings of this paper is that domestic savings and education contribute to the growth of the country's service sector in the long-run.It is therefore important for the country to set up mechanisms to sufficiently mobilize domestic savings ("banking" of the entire population, low rate of bank account opening, etc.) and to further increase the level of its human capital, in order not only to finance its growth soundly, but also and above all to increase its capacity to absorb new technologies by reducing the cost of imitating ideas discovered elsewhere.
Three variables inflation, infrastructure and trade openness -all contribute significantly and negatively to the long-run growth of the service sector.With regard to inflation, we suggest preserving the population's purchasing power through more regular market supplies and an increase in the nominal income distributed in the country.With regard to infrastructure, the result would be explained by the country's poor endowment of structural infrastructure in sufficient quantity and quality (BAD, 2018).The Ivorian government needs to strengthen its infrastructure, to boost the competitiveness of the economy and the efficiency of investments, since the availability and quality of infrastructure, harmoniously distributed, will contribute to improving the competitiveness of the economy.In terms of openness, the Ivorian State must strengthen its trade exchanges through genuine regional integration.This will promote opportunities throughout the country, enable an increase in internal and external trade flows, and improve people's standard of living.

Copyrights
Copyright for this article is retained by the author(s), with first publication rights granted to the journal.
This is an open-access article distributed under the terms and conditions of the Creative Commons Attribution license (http://creativecommons.org/licenses/by/4.0/).

Figure 1 .
Figure 1.Optimal model with Schwartz Bayesian Criterium

Table 1 .
Description of variables Source: The authors.

Table 2 .
Summary statistics

Table 3 .
Pearson correlation matrix between variables and Variance Inflator Factors (VIFs)

Table 4 .
Results of ADF and PP unit root tests (with constant and trend)

Table 5 .
Results of the Zivot-Andrews unit root test Note.***, **and * indicate the significance level at 1% ,5% and 10% respectively and TB is the Time break.With the ADF and ZA tests, the FDI, SAVE and INFL variables are stationary in level I(0) and the SVAD, TO, EDUC and INFR variables are stationary in first difference I(1).With the PP test, the FDI and INFL variables are stationary at I(

Table 7 .
(CAPEC, 2021)andCNUCED, 2019)-run estimates , there has been a deficit in FDI inflows to Côte d'Ivoire in recent years compared with other sub-Saharan African countries, although a large proportion has gone into the services sector(BCEAO, 2007 andCNUCED, 2019).For example, over the period 2014-2017, 39.1% of total FDI inflows to Côte d'Ivoire went into the services sector (See table 9 in Appendix A).Indeed, FDI in Côte d'Ivoire remains low compared with sub-Saharan Africa and lower-middle-income countries (Ministè re du plan et du dé veloppement, 2020).Between 1994 and 1998, Côte d'Ivoire had the highest level of FDI.From 1999, as a result of socio-political instability, FDI fell only to begin a slight recovery later on (CAPEC, 2021).Although developments show an upward trend in FDI in the various countries of sub-Saharan Africa, Ghana has recorded the highest volume of FDI since the socio-political crisis.In 2019, for example, this FDI volume was estimated respectively at 2318.8 million USD for Ghana, 1008.70 million USD for Côte d'Ivoire, 983.33 million USD for Senegal and 781.63 8 million USD for Cameroon(CAPEC, 2021).The level of FDI inflows remains low, both in absolute and relative terms.Estimated at 1.8% of GDP in 2018, it is below what other countries in the region attract and well below the country's potential.The FDI stock represented just under a quarter of GDP in 2018, compared with an average of 38% in Africa and 30% in West Africa (CNUCED, 2019). First

Table 8 .
ARDL model long-run diagnostic testsThe null hypothesis is accepted for all tests.The model is thus statistically validated.The estimated ARDL(3, 4,  4, 4, 4, 4)model is good overall, and provides a good explanation of the dynamics of service sector growth in Côte d'Ivoire from 1980 to 2021 (See R-squared and Adjusted-R squared).The F-statistic shows that the model is globally significant (See Table7).Figures2 and 3show that the CUSUM and CUSUM Squares test statistics, after introducing a dummy variable to account for the SVAD break in 1997, evolve well within the confidence interval at the 5% threshold.We conclude in favor of parameter stability.The model is therefore structurally and punctually stable.
Note. the straight lines represent critical bounds at 5% significance level.

Table 9 .
Note 1. Center for the Promotion of Investments in Côte d'Ivoire born in September 1993.It was restructured in September 2012 by a decree stipulating that it is the One-Stop Shop for Investment in Côte d'Ivoire.Foreign direct investment by sector (as a percentage of total FDI inflows)