scholarly journals Impact of Tax Incentives on Foreign Direct Investment: Evidence from Africa

2021 ◽  
Vol 13 (15) ◽  
pp. 8661
Author(s):  
Seth Nana Kwame Appiah-Kubi ◽  
Karel Malec ◽  
Joseph Phiri ◽  
Mansoor Maitah ◽  
Zdeňka Gebeltová ◽  
...  
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Global Economy ◽  
Random Effect ◽  
Tax Incentives ◽  
Business Environment ◽  
Sustainable Growth ◽  
Poverty Eradication ◽  
African Countries ◽  
Tax Holidays

African countries have faced competition and several challenges to attract foreign direct investment given the role that FDIs play in the development process. Several efforts made have been futile because of numerous factors that play against the business environment for foreign investments. Our paper analyses the influence of tax incentives on foreign direct investment in African economies based on data from 2000–2018. We utilized panel data on forty (40) African countries and an econometric model of four proxies of tax incentives, after controlling other variables, with robust Random Effect as our discussion estimator. Our results revealed that FDI responds to lower corporate income tax (CTR). Furthermore, foreign direct investment predominates in African economies with longer tax holidays and withholding tax. However, tax concession is insignificant to the inflows of FDIs in Africa. Summarizing, our results recommend that without proper restructuring of the tax incentives to deal with policy lapses by the governments of Africa, achieving the four main goals, i.e., poverty eradication, sustainable growth and development, African integration in the competitive global economy, and women empowerment, will be hindered.

The Rise of Transnational Corporations from Developing Countries in the Second Half of the 20th Century

Istoriya ◽  
2021 ◽  
Vol 12 (11 (109)) ◽  
pp. 0
Author(s):  
Alexey Kuznetsov
Keyword(s):  
Developing Countries ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Global Economy ◽  
World Order ◽  
Developed Countries ◽  
Global South ◽  
Business Environment ◽  
Outward Foreign Direct Investment ◽  
Foreign Direct Investment Stock

The article highlights three stages of the formation of multinationals from developing countries. Although first Argentine TNCs appeared at the turn of the 19th — 20th centuries, in the majority of the Global South countries TNCs appeared in the 1960s — 1980s. With the collapse of the bipolar world order, which in many developing countries was accompanied by significant internal political and economic transformations, the second stage of foreign expansion of TNCs from the Global South began. Indeed, in 1990 they accounted for 6 % of global outward foreign direct investment stock, while the figure was 10 % by the end of 2005. We date the beginning of the third stage to the financial and economic crisis of 2007—2009, since multinationals from developing countries as a whole are more successfully overcoming the period of turbulence in the global economy. By the end of 2020, they accounted for 22 % of global outward foreign direct investment stock, and during the COVID-19 pandemic crisis they generally exported more than 50% of the capital. The modern foreign expansion of such TNCs has many reasons, differs greatly from country to country, and often differs slightly from the specifics of Western multinationals. At the same time, initially, “late internationalization” in developing countries had two main vectors — the use of new opportunities for South — South cooperation and overcoming, through the creation of subsidiaries in highly developed countries, the shortcomings of the business environment of “catching up” countries.

scholarly journals The Impact of Terrorism Activities As Threat To Unstable Economy on Foreign Direct Investments FDI: A Panel Study of 33 Sub-Saharan African Countries

2020 ◽  
Vol 5 (4) ◽  
Author(s):  
Yao HongXing ◽  
Winfred Okoe Addy ◽  
Samuel Kofi Otchere ◽  
Robert Yao Aaronson ◽  
Jean-Jacques Dominique Beraud
Keyword(s):  
Foreign Direct Investment ◽  
Linear Relationship ◽  
Direct Investment ◽  
Panel Study ◽  
Random Effect ◽  
Foreign Direct Investments ◽  
African Countries ◽  
Non Linear ◽  
Sub Saharan ◽  
The Impact

The study aims to assess the impact of terrorism activities on foreign direct investment in a panel study of 33 Sub-Saharan African countries. In order to achieve the objective of the study, it employed panel data methodologies such as GLS random-effect, ML random-effect, fixed effect regression, generalized linear model and multivariate regression methods to enable it make statistically and robust inference or conclusion. However, the study found that there is an inverse linear relationship or impact on foreign direct investment in Sub-Saharan Africa. Also, the study found out that economic growth and foreign direct investment are inversely related and corruption control has positive and direct linear relationship with foreign direct investment. As the study focused on the linear relationship of terrorism activities and foreign direct investments, it recommends further studies into the subject-matter by employing the non-linear approaches to ascertain the non-linear relationship between the two.

scholarly journals Quest for Sustainable Growth, Does Foreign Direct Investment Still Matter? Evidence in Africa

2019 ◽  
Vol 7 (4) ◽  
pp. 397-409
Author(s):  
Adewosi, O. Adegoke ◽  
Manu Donga ◽  
Adamu Idi
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Developing Economies ◽  
Negative Impact ◽  
Political Stability ◽  
Fixed Effect Model ◽  
Sustainable Growth ◽  
Domestic Investment ◽  
African Countries

The debate on the role of Foreign Direct Investment in promoting rapid growth and development of the developing economies remain inconclusive. This paper examined whether FDI still matters in African Countries over the period of 1990 to 2017, with the proper utilization of panel data estimation technique on the annual country data that were sourced from world Governance and Development Indicators. Using random and fixed effect model, the results reveal that some important variables such as coefficient of trade openness, rule of law, political stability, capital formation and population positively determined economic growth in Africa countries, account for about 2, 1, 65, 170, and 396.7 percent increase in economic growth. While, FDI and inflation were found to have negative impact on economic growth accounting for 21.4 and 2 percent fall in economic growth over the study period. The study then recommends amongst others formulation and implementation of policies that encourage domestic investment in the continents.

scholarly journals Determinants of chinese outward foreign direct investments in africa; sadc and non-sadc countries

2015 ◽  
Vol 1 (1) ◽  
pp. 44-63
Author(s):  
Audria Philes Cosmas ◽  
Xi Aihua
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Global Economy ◽  
Panel Data Analysis ◽  
Foreign Direct Investments ◽  
Economic Activities ◽  
African Countries ◽  
Per Capita ◽  
Main Determinants ◽  
Chinese Foreign Direct Investment

As globalization has led to rapid increase in foreign direct investment, China‘s outward foreign direct investments has also been growing rapidly in the global economy. Recently, there have been rapid growing economic activities between China and Africa. Many African countries are trying their best to find ways to attract more Chinese foreign direct investment (OFDI).The performance of Southern Africa Developing Community (SADC) in attracting foreign directinvestment if compared with other regions is poor. This paper aimed at identifying and analyzing the determinants of Chinese OFDI in Africa particularly in SADC and making a comparison between SADC and non-SADC countries. Using panel data analysis for a sample of 21 African countries over the period 2005 to 2012 the study showed that the main determinants identified and most significant in SADC were GDP per Capita, imports, openness to FDI, telephone lines (per 100 people) and being a SADC member.

The Contribution of Foreign Direct Investment for Economic Growth of Ethiopia: Time Series Analysis

2018 ◽  
Vol 9 (02) ◽  
Author(s):  
Addissie Melak
Keyword(s):  
Economic Growth ◽  
Time Series ◽  
Foreign Direct Investment ◽  
Time Series Analysis ◽  
Direct Investment ◽  
Policy Framework ◽  
Annual Growth Rate ◽  
African Countries ◽  
Series Analysis ◽  
Integration Test

Economic growth of countries is one of the fundamental questions in economics. Most African countries are opening their economies for welcoming of foreign investors. As such Ethiopia, like many African countries took measures to attract and improve foreign direct investment. The purpose of this study is to examine the contribution of foreign direct investment (FDI) for economic growth of Ethiopia over the period of 1981-2013. The study shows an overview of Ethiopian economy and investment environment by the help of descriptive and econometric methods of analysis to establish empirical investigation for the contribution of FDI on Ethiopian economy. OLS method of time series analysis is employed to analyse the data. The stationary of the variables have been checked by using Augmented Dickey Fuller (ADF) Unit Root test and hence they are stationery at first difference. The co- integration test also shows that there is a long run relationship between the dependent and independent variables. Accordingly, the finding of the study shows that FDI, GDP per capita, exchange rate, total investment as percentage of GDP, inflow of FDI stock, trade as percentage of GDP, annual growth rate of GDP and liberalization of the economy have positive impact on Ethiopian GDP. Whereas Gross fixed domestic investment, inflows of FDI and Gross capital formation influence economic growth of Ethiopia negatively. This finding suggests that there should be better policy framework to attract and improve the volume of FDI through creating conducive environment for investment.

Economic Actors' Lobbying Influence on the Prospects for War and Peace

2013 ◽  
Vol 67 (4) ◽  
pp. 863-888 ◽  
Author(s):  
Stephen G. Brooks
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Global Economy ◽  
Economic Globalization ◽  
Economic Incentives ◽  
Special Interests ◽  
War And Peace ◽  
The Past ◽  
The Government

AbstractPolitical scientists and economists have long been interested in the role of special interests in the policymaking process. In the past few years, a series of important new books have argued forcefully that the lobbying activities of economic actors have an important influence on the prospects for war and peace. All of these analyses claim that whether economic actors enhance or decrease the likelihood of conflict ultimately depends on the domestic political balance between economic actors who have a strong vested interest in pushing for peace versus those that do not. I advance two contrary arguments. At least among the advanced states, I posit there are no longer any economic actors who will be favorable toward war and who will lobby the government with this preference. All of the identified mechanisms that previously contributed to such lobbying in these states have been swept away with the end of colonialism and the rise of economic globalization. In particular, I show that the current structure of the global economy now makes it feasible for foreign direct investment to serve as an effective substitute for conquest in a way that was not possible in previous eras. My second argument concerns those economic actors in advanced states with a preference for peace. I posit that it has become unnecessary for them to directly lobby the government to avoid war on economic grounds because economic globalization—the accumulation of decisions by economic actors throughout the globe—now has sufficiently clear economic incentives for leaders.

FINANCIAL INTEGRATION AND ENVIRONMENT IN AFRICA: THE ROLE OF OUTPUT GROWTH AND FOREIGN DIRECT INVESTMENT

2021 ◽  
pp. 2150002
Author(s):  
EKUNDAYO PETER MESAGAN ◽  
KAYODE ABIODUN AKINYEMI ◽  
ISMAILA AKANNI YUSUF
Keyword(s):  
South Africa ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Financial Integration ◽  
Ordinary Least Squares ◽  
Output Growth ◽  
Particulate Emissions ◽  
African Countries ◽  
Output Increase ◽  
Specific Emissions

As economies integrate financially and both investment and output increase, the environment may be affected depending on the nature of international financial resources attracted into the country. Hence, this study examines the effect of financial integration, output growth, and foreign direct investment (FDI) on the environment in selected African countries involving Nigeria, South Africa, Egypt, Algeria, and Angola between 1980 and 2017. The study uses carbon emissions and particulate emissions (PM) to proxy pollution and analyze the data through the fully modified ordinary least squares (FMOLS) technique. Empirical results show that financial integration worsens pollution in Egypt, Nigeria, Algeria, and in Africa; output growth deteriorates pollution in South Africa, Algeria, Angola, and in Africa; while FDI fuels environmental degradation in Egypt and South Africa. We recommend that African countries should strive to establish specific targets for lowering emissions even though the Kyoto Protocol did not set specific emissions reduction targets for them.

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