IDEAS home Printed from https://ideas.repec.org/p/ctn/dpaper/2019-03.html
   My bibliography  Save this paper

Physical Capital, Skill Intensity and Ownership Structure in Foreign Direct Investment Projects in Sub-Saharan Africa

Author

Listed:
  • J. Paul Dunne

    (School of Economics, University of Cape Town)

  • Santigie Mohamed Kargbo

    (West African Monetary Institute (WAMI), Ghana)

Abstract

While the intra-firm trade literature finds that capital-intensive foreign direct investment (FDI) is more likely to occur through joint ventures with local companies when targeted at capital-intensive industries, there is scant evidence on what happens in developing countries. This paper investigates FDI in sub-Saharan Africa, using a large firm-level dataset of manufacturing and services sectors for 19 countries in the region in 2010. It finds strong evidence that domestic firms are indeed more likely to be integrated in FDI projects in capital-intensive rather than labour-intensive sectors. This means that the composition of FDI matters for developing countries, as more capital-intensive FDI is more likely to result in joint ventures and this should facilitate knowledge and technology spillovers to the local agents. In addition, it implies that support is needed to develop skills in local firms in capital-intensive sectors to encourage foreign firms to engage in joint ventures with them, rather than set up wholly owned subsidiaries and outsource.

Suggested Citation

  • J. Paul Dunne & Santigie Mohamed Kargbo, 2019. "Physical Capital, Skill Intensity and Ownership Structure in Foreign Direct Investment Projects in Sub-Saharan Africa," School of Economics Macroeconomic Discussion Paper Series 2019-03, School of Economics, University of Cape Town.
    • Handle: RePEc:ctn:dpaper:2019-03
    as

    Download full text from publisher

    File URL: https://docs.google.com/viewer?a=v&pid=sites&srcid=ZGVmYXVsdGRvbWFpbnxzb2VtYWNyb2Vjb3xneDo3MDczNTAxNDQ4ZjBhMzlk
    File Function: Full text
    Download Restriction: no
    ---><---

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:ctn:dpaper:2019-03. 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: Kevin Kotze (email available below). General contact details of provider: https://edirc.repec.org/data/seuctza.html .

    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.