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This study investigates the impact of foreign direct investment
on the level of firm technical efficiency in West Africa. Firms from Nigeria,
Ghana, Sierra Leone and the Gambia were sampled due to the fact that they
used to belong to the British Empire. The data, sourced from the World
Bank enterprise survey, covers the period from 2006 to 2018, with the sam-
pled countries having data for different years. A time varying stochastic fron-
tier production function for panel was developed for this enquiry. The find-
ings of the study show that foreign direct investment has a significant and
positive impact on both technical efficiency and productivity of firms in West
Africa. Controlling for other effects, international trade and firm size both
have positive and significant effects on firm level technical efficiency. There-
fore, policies should be aimed at encouraging more inflows and maintenance
of the stock of foreign direct investment to avert divestments. This includes,
but is not limited to, ensuring sociopolitical stability and introducing poli-
cies that would remove bureaucratic bottlenecks from the path of direct in-
vestment inflow and simplify the process of doing business in these countries.
