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Determinants of Foreign Direct Investment Inflows in Southern African Development Community (SADC) Member Countries

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  • Khamis Hamad Ali
  • Suleiman Malik Faki
  • Salim Hamad Suleiman

Abstract

We examined the determinants of Foreign Direct Investment Inflows in SADC member countries. The study employed Pooled OLS as the main estimation method and using data from the period 1995–2016. Our results revealed that infrastructure, trade openness and market size are positive and significant determinants of FDI inflows in SADC Countries. Results support the previous theory like Hecksehel-Ohlin (1933) and eclectic paradigm or OLI framework developed by Dunning (1980). However, human capital has positive insignificant and inflation has negative significant with FDI inflows for the SADC member countries. Therefore, SADC countries should promote trade agreements to facilitate exportation which has linked with industrial sectors, In addition, SADC countries should reform investment policy to attract more foreign inflow into SADC countries in the long run. The availability and reliability of the good infrastructure of attract many investors to invest in the region

Suggested Citation

  • Khamis Hamad Ali & Suleiman Malik Faki & Salim Hamad Suleiman, 2018. "Determinants of Foreign Direct Investment Inflows in Southern African Development Community (SADC) Member Countries," International Journal of Science and Business, IJSAB International, vol. 2(4), pages 616-623.
    • Handle: RePEc:aif:journl:v:2:y:2018:i:4:p:616-623
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    1. Dondashe, Nandipha & Phiri, Andrew, 2018. "Determinants of FDI in South Africa: Do macroeconomic variables matter?," MPRA Paper 83636, University Library of Munich, Germany.
    2. Akinleye Simeon Oludiran & Laleye Nicaise Abimbola, 2018. "Major Determinants of Foreign Direct Investment in the West African Economic and Monetary Region," Iranian Economic Review (IER), Faculty of Economics,University of Tehran.Tehran,Iran, vol. 22(1), pages 121-162, Winter.
    3. Ms. Elif C Arbatli Saxegaard, 2011. "Economic Policies and FDI Inflows to Emerging Market Economies," IMF Working Papers 2011/192, International Monetary Fund.
    4. Schneider, Friedrich & Frey, Bruno S., 1985. "Economic and political determinants of foreign direct investment," World Development, Elsevier, vol. 13(2), pages 161-175, February.
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    Cited by:

    1. Awadhi, Mohamed & James, Moshi & Byaro, Mwoya, 2021. "Does Institutional Development attract Foreign Direct Investments in Sub-Saharan Africa? A Dynamic Panel Analysis," African Journal of Economic Review, African Journal of Economic Review, vol. 10(1), December.
    2. Reginald Masimba Mbona & Chilombo Stephania Mumba & Tinashe Mangudhla, 2021. "Fixed Investment and Economic Growth: ARDL and Causality Exploration for SADC Countries," Business and Economic Research, Macrothink Institute, vol. 11(4), pages 18-38, December.
    3. Muhammad Mahmud Mostafa, 2020. "Impacts of Inflation and Exchange Rate on Foreign Direct Investment in Bangladesh," International Journal of Science and Business, IJSAB International, vol. 4(11), pages 53-69.

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