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Does FDI Contribute to the Integration into the Global Economy? Time-Series Evidence for Ten African Countries

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  • Yaya Keho

    () (Higher National School of Applied Statistics and Economics (ENSEA))

Abstract

This study investigates the relationship between FDI and exports in a sample of ten African countries. Using annual data from 1970 to 2007, we find that FDI causes exports in Burkina Faso and South Africa supporting the FDI-led exports point of view, while exports cause FDI in Cameroon, Cote d’Ivoire and Kenya, supporting the hypothesis that outward oriented economies attract more FDI. We find bidirectional causality in Ghana, Nigeria and Zambia, implying a virtuous circle of FDI and exports. We do not find causality for Congo and Gabon.

Suggested Citation

  • Yaya Keho, 2012. "Does FDI Contribute to the Integration into the Global Economy? Time-Series Evidence for Ten African Countries," The African Finance Journal, Africagrowth Institute, vol. 14(1), pages 67-86.
  • Handle: RePEc:afj:journl:v:14:y:2012:i:1:p:67-86
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    Keywords

    Foreign direct investment; Exports; Cointegration; Granger causality; Sub-Saharan Africa;

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • F10 - International Economics - - Trade - - - General
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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