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The relationship between foreign direct investment and GDP in Cameroon (2000–2020)

Author

Listed:
  • Levis Petiho Numbu

    (Ural Federal University, Gadget Zone 237)

  • Zhanna S. Belyaeva

    (Ural Federal University)

Abstract

Relevance. In the last 20 years Cameroon has faced a series of crises. The 2035 governmental programme of recovery aims to transform the country into an emerging economy nation. The effects of the COVID-19 pandemic have slowed down economic growth in Cameroon and the country is hoping to attract foreign direct investment (FDI) and thus benefit from the new business opportunities to revitalize its economy. This context makes the research on the relationship between FDI and GDP particularly relevant. Research objective. This paper is designed to assess the relationship between GDP and FDI in Cameroon in 2000-2020. In addition, we aim to assess the scope of internationalization through FDI as a possible catalyst for economic recovery. Data and Methods. The paper uses correlation and regression analysis to show the relationship between FDI and GDP. Results. The results show that FDI can increase Cameroon’s GDP and may be used as an empirical basis for policy- and strategy-making in Cameroon. Conclusion. We found a strong correlation between FDI and GDP in Cameroon for a 21-year period. This result is supported by the double effect of FDI on the national economy: FDI directly affects the investment component of GDP, but it also influences economic growth indirectly. The activities of foreign firms in Cameroon can support trade and even balance of payment, which indirectly influences the export and import component of GDP. Foreign subsidiaries both solely owned or joint ventures pay indirect taxes to the government and thus influence government spending.

Suggested Citation

  • Levis Petiho Numbu & Zhanna S. Belyaeva, 2021. "The relationship between foreign direct investment and GDP in Cameroon (2000–2020)," R-Economy, Ural Federal University, Graduate School of Economics and Management, vol. 7(3), pages 200-209.
    • Handle: RePEc:aiy:journl:v:7:y:2021:i:3:p:200-209
    DOI: 10.15826/recon.2021.7.3.018
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    Cited by:

    1. Sergey Nikolaevich Silvestrov & Sergey Alekseevich Pobyvaev & Stanislav Borisovich Reshetnikov & Dmitrii Vladimirovich Firsov, 2022. "Management of the Russian Interregional Investment Distribution Using the Autonomous Expenditure Multiplier Model," Economies, MDPI, vol. 10(2), pages 1-18, February.

    More about this item

    Keywords

    technology; human resource management; technological development; improvement; efficiency; automation; innovation;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development

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