IDEAS home Printed from https://ideas.repec.org/a/taf/irapec/v35y2021i1p45-63.html
   My bibliography  Save this article

Re-examining the causal relationships among FDI, economic growth and financial sector development in Africa

Author

Listed:
  • Muazu Ibrahim
  • Abraham Mensah Acquah

Abstract

Studies on the causal relationships among foreign direct investment (FDI), economic growth and financial sector development are far from being conclusive, a reflection of the different methodologies and country-settings employed. In this study, we depart from the use of single country cases to relying on a panel data comprising 45 African countries over the period 1980 to 2016 in examining such causal linkages. By applying a panel Granger Non-Causality test, we find that the causal nexus between FDI and economic growth is conditioned on the indicator of economic growth while we observe feedback causality between (i) FDI and financial sector development, and (ii) financial sector development and economic growth. These findings hold irrespective of the proxy of finance and economic growth. The study concludes by discussing key implications for policy.

Suggested Citation

  • Muazu Ibrahim & Abraham Mensah Acquah, 2021. "Re-examining the causal relationships among FDI, economic growth and financial sector development in Africa," International Review of Applied Economics, Taylor & Francis Journals, vol. 35(1), pages 45-63, January.
    • Handle: RePEc:taf:irapec:v:35:y:2021:i:1:p:45-63
    DOI: 10.1080/02692171.2020.1822299
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/02692171.2020.1822299
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/02692171.2020.1822299?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Shahid Iqbal & Abdul Qayyum Khan & Muhammad Yar Khan & Lamya Al-Aali, 2021. "The Dynamics of Financial Development, Government Quality, and Economic Growth in Different Groups of Economies," Sustainability, MDPI, vol. 13(14), pages 1-14, July.
    2. Bimpong, Patrick & Addai, Bismark & Achinah, Solomon Kwadwo, 2022. "Analysis of the causal nexus between mining exports and the environment," Resources Policy, Elsevier, vol. 79(C).
    3. Khan, Seefat-E-Rabbi & Asteriou, Dimitrios & Jefferies, Claudia, 2023. "Can FDI explain the growth disparity of the BRIC and the non-BRIC countries? Theoretical and empirical evidence from panel growth regressions," Economic Modelling, Elsevier, vol. 124(C).
    4. Gibogwe, Vincent & Nigo, Ayine R.S. & Kufuor, Karen, 2022. "Foreign direct investment and economic growth in Tanzania," MPRA Paper 115028, University Library of Munich, Germany, revised 20 Oct 2022.
    5. Musah, Alhassan & Yakubu, Ibrahim Nandom & Abagna, Matthew Amalitinga, 2022. "Financial Literacy: A Peep into the Literature and Note for Policy," MPRA Paper 115703, University Library of Munich, Germany.
    6. Huang, Geng & Lin, Xi & He, Ling-Yun, 2023. "Good for the environment? Foreign investment opening in service sector and firm's energy efficiency," Energy Economics, Elsevier, vol. 127(PA).
    7. Nigo, Ayine R.S. & Gibogwe, Vincent, 2023. "Empirical Research on Financial Efficiency and Economic Growth in Sub-Saharan Africa," MPRA Paper 116041, University Library of Munich, Germany, revised 14 Dec 2022.
    8. Mohd Arshad Ansari & Muhammed Ashiq Villanthenkodath & Vaseem Akram & Badri Narayan Rath, 2023. "The nexus between ecological footprint, economic growth, and energy poverty in sub-Saharan Africa: a technological threshold approach," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(8), pages 7823-7850, August.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:irapec:v:35:y:2021:i:1:p:45-63. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/CIRA20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.