IDEAS home Printed from https://ideas.repec.org/p/kan/wpaper/200702.html
   My bibliography  Save this paper

The Effect of the Liberalization of Investment Policies on Employment and Investment of Multinational Corporations in Africa

Author

Listed:
  • Elizabeth Asiedu

    (Department of Economics, The University of Kansas)

  • Kwabena Gyimah-Brempong

    (Department of Economics, University of South Florida)

Abstract

There has been a remarkable shift in the attitudes towards globalization. Specifically, the discussion among academics and policymakers has shifted from whether globalization should be encouraged to how countries can position themselves to benefit from globalization. This paper focuses on one aspect of globalization – the liberalization of investment policies – and analyzes its impact on employment and investments by multinational corporations in Africa. We use data for 33 countries over the period 1984-2003 and we employ a dynamic panel estimator for our analysis. There are two major findings. First, liberalization has a significant and positive effect on investment. Second, liberalization does not have a direct impact on multinational employment – the effect is indirect: liberalization stimulates multinational investments which in turn increases multinational employment. By increasing investment and employment from multinational firms, these liberalization programs contribute to poverty alleviation.

Suggested Citation

  • Elizabeth Asiedu & Kwabena Gyimah-Brempong, 2007. "The Effect of the Liberalization of Investment Policies on Employment and Investment of Multinational Corporations in Africa," WORKING PAPERS SERIES IN THEORETICAL AND APPLIED ECONOMICS 200702, University of Kansas, Department of Economics.
    • Handle: RePEc:kan:wpaper:200702
    as

    Download full text from publisher

    File URL: http://www2.ku.edu/~kuwpaper/2007Papers/200702.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    Citations

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


    Cited by:

    1. Das Minakshee, 2020. "Does Foreign Direct Investment (FDI) Promote Socioeconomic Development? Evidence from Advanced, Emerging-market, Developing and Transition Economies," Man and the Economy, De Gruyter, vol. 7(1), pages 1-25, June.
    2. Justine Kyove & Katerina Streltsova & Ufuoma Odibo & Giuseppe T. Cirella, 2021. "Globalization Impact on Multinational Enterprises," World, MDPI, vol. 2(2), pages 1-15, April.
    3. Abidemi C. Adegboye, 2020. "Macroeconomic policies and sustainable employment yields in sub‐Saharan Africa," African Development Review, African Development Bank, vol. 32(4), pages 515-527, December.
    4. Fadel Jaoui & Omolola Amoussou & Francis H. Kemeze, 2022. "“Catch me if you can” on drivers of venture capital investment in Africa," African Development Review, African Development Bank, vol. 34(S1), pages 117-140, July.
    5. Gibson Hosea Munisi & Roy Mersland, 2016. "Ownership, Board Compensation and Company Performance in Sub-Saharan African Countries," Journal of Emerging Market Finance, Institute for Financial Management and Research, vol. 15(2), pages 191-224, August.
    6. Elie NGONGAN, 2014. "Physical Infrastructures and Attractiveness of Private Capital in Sub-Saharan African (SSA) Countries," Journal of Economics Library, KSP Journals, vol. 1(1), pages 9-21, December.
    7. Biruk Birhanu Ashenafi & Yan Dong, 2023. "Financial openness, financial sector development, and income inequality: With an extensive set of pull and push factors," African Development Review, African Development Bank, vol. 35(2), pages 138-151, June.
    8. Aruna Gounder & Rod Falvey & Gulasekaran Rajaguru, 2019. "The Effects of Preferential Trade Agreements on Foreign Direct Investment: Evidence from the African Caribbean Pacific Region," Open Economies Review, Springer, vol. 30(4), pages 695-717, September.
    9. John Nkwoma Inekwe, 2013. "FDI, Employment and Economic Growth in Nigeria," African Development Review, African Development Bank, vol. 25(4), pages 421-433.
    10. John C. Anyanwu, 2013. "Characteristics and Macroeconomic Determinants of Youth Employment in Africa," African Development Review, African Development Bank, vol. 25(2), pages 107-129, June.
    11. Eva Rytter Sunesen, 2009. "Examining the Regional Aspect of Foreign Direct Investment to Developing Countries," Discussion Papers 09-02, University of Copenhagen. Department of Economics.
    12. SHIKUR, Zewdie Habte, 2024. "Economic Freedom, Financial Development And Foreign Direct Investment Inflows In African Countries, 2007-2018," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 24(1), pages 81-96.
    13. Ngongan, Elie, 2014. "Physical Infrastructures and Attractiveness of Private Capital in Sub-Saharan African (SSA) Countries," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 1(1), pages 7-21.

    More about this item

    Keywords

    Africa; employment; foreign direct investment; U.S. multinationals.;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

    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:kan:wpaper:200702. 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: Professor Zongwu Cai (email available below). General contact details of provider: https://edirc.repec.org/data/deuksus.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.