scholarly journals Assessing the impact of Chinese foreign direct investment on economic growth in sub-Saharan Africa

2018 ◽  
Vol 12 (17) ◽  
pp. 536-541 ◽  
Author(s):  
Saliou Kokouma Diallo Mamadou ◽  
Luan Jingdong ◽  
Diallo Hawaou
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Sub Saharan Africa ◽  
Sub Saharan ◽  
Chinese Foreign Direct Investment ◽  
The Impact

The relationships between foreign direct investment, domestic savings, domestic investment, and economic growth: The case of Sub-Saharan Africa

2016 ◽  
Vol 38 (2) ◽  
pp. 193-217
Author(s):  
Nurudeen Abu ◽  
Mohd Zaini Abd Karim
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Foreign Investment ◽  
Direct Investment ◽  
Sub Saharan Africa ◽  
Domestic Investment ◽  
Long Run ◽  
Domestic Savings ◽  
Sub Saharan ◽  
The Impact

Despite the large body of research on foreign direct investment, domestic savings, domestic investment and economic growth, little has been done to investigate the relationships among them. This paper examines the relationships among foreign direct investment, domestic savings, domestic investment, and economic growth in 16 Sub-Saharan African (SSA) countries from 1981 to 2011, using various techniques. The results of VAR estimation and Granger causality tests demonstrate that there is a unidirectional causality from foreign investment to growth and domestic investment, savings to growth, and a bidirectional causality between growth and domestic investment as well as savings and domestic investment. The results of the variance decomposition analysis reveal that foreign investment exerts more influence on growth. Savings are more important in explaining domestic investment, growth is more important in explaining foreign investment, and domestic investment is more important in explaining savings. Based on the results of the impulse response analysis, there is a positive unidirectional causality from foreign investment to growth and domestic investment, savings to growth, and a positive bidirectional causality between savings and domestic investment, both in the short and long-run. Although there is feedback causality between domestic investment and growth, the impact from investment is negative in the short-run and positive in the long-run. Thus, policies that encourage foreign investment and savings are required to boost domestic investment and promote growth, and policies that raise domestic investment will lead to higher savings and growth in SSA.

scholarly journals Impact of Stock Market Development on Economic Growth: Evidence from Selected Sub‑Saharan African Countries

2019 ◽  
Vol 67 (4) ◽  
pp. 1071-1083
Author(s):  
Daniel Kwabena Twerefou ◽  
Emmanuel Abbey ◽  
Emmanuel A. Codjoe ◽  
Peter Saitoti Ngotho
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Stock Market ◽  
Direct Investment ◽  
Positive Impact ◽  
Sub Saharan Africa ◽  
Market Development ◽  
Stock Market Development ◽  
Sub Saharan ◽  
The Impact

This paper examines the impact of stock market development on economic growth in Sub‑Saharan Africa using a balanced panel data of five selected countries over the period 1993 – 2013 and the system generalised method of moments dynamic panel estimation framework. The paper finds a positive impact of stock market development proxied by the turnover ratio of domestic shares and market capitalization on economic growth though minimal. Furthermore, investment, lagged gross domestic product and human capital were found to have a significantly positive impact on growth while trade and foreign direct investment negatively impacted on growth, even though the results for foreign direct investment is not significant in all the models and consequently, not very robust. There should be policy measures aimed at enhancing economic growth using the development of the stocks market as a channel. Such policies should focus on developing the appropriate mix of taxation of investors as well as the development of requisite technology, institutional and regulatory framework that will facilitate an increase in the size and liquidity of the market in the sub‑region.

China’s Economic Expansion in Sub-Saharan Africa

2018 ◽  
pp. 113-148
Author(s):  
Rhys Jenkins
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Sub Saharan Africa ◽  
Economic Expansion ◽  
Economic Relations ◽  
Different Types ◽  
Sub Saharan ◽  
The Impact ◽  
Engineering Projects

The chapter documents the growth of economic relations between China and Sub-Saharan Africa (SSA), focussing on trade, foreign direct investment, Chinese construction and engineering projects, loans, and aid. The chapter highlights the way in which these are sometimes combined in resources-for-infrastructure deals. It shows the variety of different actors involved in these relationships, including state and non-state actors, on both the Chinese and African sides. It then discusses the role of strategic diplomatic, strategic economic, and commercial objectives in the growing Chinese involvement in SSA. It also addresses questions of African agency and the interests of African actors in economic relations with China. The impact of political, strategic economic and commercial factors on different types of economic relations is then analyzed econometrically.

Effect of Infrastructure and Foreign Direct Investment on Economic Growth in Sub-Saharan Africa

2019 ◽  
Vol 11 (3) ◽  
pp. 183-201 ◽  
Author(s):  
Edward Nketiah-Amponsah ◽  
Bernard Sarpong
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Multinational Enterprises ◽  
Generalized Method Of Moments ◽  
Business Environment ◽  
Transport Infrastructure ◽  
Sub Saharan Africa ◽  
Economic Infrastructure ◽  
Sub Saharan

This article investigates the effect of infrastructure and foreign direct investment (FDI) on economic growth in Sub-Saharan Africa (SSA) using panel data on 46 countries covering the period 2003–2017. The data were analyzed using fixed effects, random effects, and system generalized method of moments (GMM) estimation techniques. Based on the system GMM estimates, the results indicate that a 1 percent improvement in electricity and transport infrastructure induces growth by 0.09 percent and 0.06 percent, respectively. Additionally, FDI proved to be growth enhancing only when interacted with infrastructure. The interactive effect of FDI and infrastructure improves economic growth by 0.016 percent. The results suggest that public provision of economic infrastructure reduces the cost of production for multinational enterprises, thus providing an incentive to increase investment in the domestic economy to sustain economic growth. The results also suggest that the impact of FDI on economic growth is maximized when some level of economic infrastructure is available. Our findings thus provide ample justification on the need for a significant government investment in infrastructure to provide a less costly business environment for both local and multinational enterprises to improve economic growth.

How does foreign direct investment affect growth in sub-Saharan Africa? New evidence from threshold analysis

2020 ◽  
Vol 47 (1) ◽  
pp. 149-181 ◽  
Author(s):  
Oyakhilome Ibhagui
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Population Growth ◽  
Direct Investment ◽  
Sub Saharan Africa ◽  
Threshold Analysis ◽  
Content Type ◽  
Threshold Levels ◽  
Sub Saharan ◽  
Ssa Countries

PurposeThe threshold regression framework is used to examine the effect of foreign direct investment on growth in Sub-Saharan Africa (SSA). The growth literature is awash with divergent evidence on the role of foreign direct investment (FDI) on economic growth. Although the FDI–growth nexus has been studied in diverse ways, very few studies have examined the relationship within the framework of threshold analysis. Furthermore, even where this framework has been adopted, none of the previous studies has comprehensively examined the FDI–growth nexus in the broader SSA. In this paper, within the standard panel and threshold regression framework, the problem of determining the growth impact of FDI is revisited.Design/methodology/approachSix variables are used as thresholds – inflation, initial income, population growth, trade openness, financial market development and human capital, and the analysis is based on a large panel data set that comprises 45 SSA countries for the years 1985–2013.FindingsThe results of this study show that the direct impact of FDI on growth is largely ambiguous and inconsistent. However, under the threshold analysis, it is evident that FDI accelerates economic growth when SSA countries have achieved certain threshold levels of inflation, population growth and financial markets development. This evidence is largely invariant qualitatively and is robust to different empirical specifications. FDI enhances growth in SSA when inflation and private sector credit are below their threshold levels while human capital and population growth are above their threshold levels.Originality/valueThe contribution of this paper is twofold. First, the paper streamlines the threshold analysis of FDI–growth nexus to focus on countries in SSA – previous studies on FDI-growth nexus in SSA are country-specific and time series–based (see Tshepo, 2014; Raheem and Oyınlola, 2013 and Bende-Nabende, 2002). This paper provides a panel analysis and considers a broader set of up to 45 SSA countries. Such a broad set of SSA countries had never been considered in the literature. Second, the paper expands on available threshold variables to include two new important macroeconomic variables, population growth and inflation which, though are important absorptive capacities but, until now, had not been used as thresholds in the FDI–growth literature. The rationale for including these variables as thresholds stems from the evidence of an empirical relationship between population growth and economic growth, see Darrat and Al-Yousif (1999), and between inflation and economic growth, see Kremer et al. (2013).

Sign in / Sign up

Export Citation Format

Share Document