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Foreign Direct Investment, Economic Freedom and Economic Performance in Sub-Saharan Africa

Author

Listed:
  • Kazeem Bello Ajide

    (University of Lagos, Nigeria)

  • Perekunah Bright Eregha

    (University of Lagos, Nigeria)

Abstract

The controversies that trailed whether direct impact of Foreign Direct Investment (FDI) on growth are conditional on a certain intermediating links or not, has made an inquiry into the likely mediating links in the FDI growth space a recurring subject of discourse.While the importance of institution has prominently featured as playing a vital role on the one hand, economic freedom (a key institutional component) has consistently been elected, as a good candidate surrogate on the other hand. It is against this backdrop this study examines the effect of FDI inflow on economic performance in the SSA region giving prominence to economic freedom. The results support the view that economic freedom is germane in influencing the economic-wide performance in the region but have insignificant effects on the different sector performances. It is recommended that economic freedom be given priority in the region and FDI should be attracted to other sectors other than the primary sector, as it is the case.

Suggested Citation

  • Kazeem Bello Ajide & Perekunah Bright Eregha, 2015. "Foreign Direct Investment, Economic Freedom and Economic Performance in Sub-Saharan Africa," Managing Global Transitions, University of Primorska, Faculty of Management Koper, vol. 13(1 (Spring), pages 43-57.
    • Handle: RePEc:mgt:youmgt:v:13:y:2015:i:1:p:43-57
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    References listed on IDEAS

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    Cited by:

    1. Singh Devesh & Gal Zoltán, 2020. "Economic Freedom and its Impact on Foreign Direct Investment: Global Overview," Review of Economic Perspectives, Sciendo, vol. 20(1), pages 73-90, March.
    2. Clive E. Coetzee & Ewert P. J. Kleynhans, 2017. "Economic Freedom and Economic Growth in South Africa," Managing Global Transitions, University of Primorska, Faculty of Management Koper, vol. 15(2 (Summer), pages 169-185.
    3. Brinda Sooreea-Bheemul & Uzma Shataz Rasool & Rajeev Sooreea, 2020. "Does Economic Freedom Matter to Foreign Direct Investment in Sub-Saharan Africa?," International Journal of Economics and Financial Issues, Econjournals, vol. 10(3), pages 195-207.
    4. Tolcha, Tassew Dufera & Tchouamou Njoya, Eric & Bråthen, Svein & Holmgren, Johan, 2021. "Effects of African aviation liberalisation on economic freedom, air connectivity and related economic consequences," Transport Policy, Elsevier, vol. 110(C), pages 204-214.

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    More about this item

    Keywords

    FDI inflow; economic freedom; economic performance; panel data analysis;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations
    • H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements

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