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FDI Determinants in Least Recipient Regions: The Case of Sub†Saharan Africa and MENA

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  • Godwin Okafor
  • Jenifer Piesse
  • Allan Webster

Abstract

This paper explores the determinants of foreign direct investment (FDI) into FDI least recipient regions. Panel data for 20 sub†Saharan Africa (SSA) and 11 Middle East and North Africa (MENA) countries are used for the period 2000–12. Findings of the fixed effects estimations suggest that FDI inflows into these regions are influenced by GDP per capita, infrastructure development, trade openness, and control of corruption. Conversely, inflation negatively affects FDI inflows, and rents from natural resources do not significantly influence FDI. Furthermore, the findings show that marginal benefits from any increase in the quantity of FDI determinants (with the exception of control of corruption) will be less for SSA countries. The paper concludes with important policy implications deduced from the findings.

Suggested Citation

  • Godwin Okafor & Jenifer Piesse & Allan Webster, 2017. "FDI Determinants in Least Recipient Regions: The Case of Sub†Saharan Africa and MENA," African Development Review, African Development Bank, vol. 29(4), pages 589-600, December.
    • Handle: RePEc:bla:afrdev:v:29:y:2017:i:4:p:589-600
    DOI: 10.1111/1467-8268.12298
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    2. Simplice A. Asongu & Nicholas M. Odhiambo, 2022. "Remittances and value added across economic sub-sectors in Sub-Saharan Africa," Quality & Quantity: International Journal of Methodology, Springer, vol. 56(1), pages 23-41, February.
    3. Simplice A. Asongu & Joseph Nnanna & Paul N. Acha-Anyi, 2021. "The Openness Hypothesis in the Context of Economic Development in Sub-Saharan Africa: The Moderating Role of Trade Dynamics on FDI," The International Trade Journal, Taylor & Francis Journals, vol. 35(4), pages 336-359, July.
    4. Asongu, Simplice & Meniago, Christelle & Salahodjaev, Raufhon, 2021. "The role of value added across economic sectors in modulating the effects of FDI on TFP and economic growth dynamics," MPRA Paper 111757, University Library of Munich, Germany.
    5. Asongu, Simplice A. & Odhiambo, Nicholas M., 2020. "Foreign direct investment, information technology and economic growth dynamics in Sub-Saharan Africa," Telecommunications Policy, Elsevier, vol. 44(1).
    6. William Bekoe & Talatu Jalloh & Wassiuw Abdul Rahaman, 2021. "Corruption and Foreign Direct Investment Inflows: Evidence from West Africa," International Journal of Business and Economic Sciences Applied Research (IJBESAR), International Hellenic University (IHU), Kavala Campus, Greece (formerly Eastern Macedonia and Thrace Institute of Technology - EMaTTech), vol. 14(3), pages 7-25, December.
    7. Asongu, Simplice & Rahman, Mushfiqur & Nnanna, Joseph & Haffar, Mohamed, 2020. "Enhancing Information Technology for Value Added Across Economic Sectors in Sub-Saharan Africa," MPRA Paper 107238, University Library of Munich, Germany.
    8. Simplice A. Asongu, 2019. "Financial Access and Productivity Dynamics in Sub-Saharan Africa," Working Papers 19/052, European Xtramile Centre of African Studies (EXCAS).
    9. Simplice A. Asongu & Nicholas M. Odhiambo, 2022. "Financial Access and Value Added in Sub-Saharan Africa: Empirical Evidence from the Agricultural, Manufacturing and Service Sectors," Working Papers 22/009, European Xtramile Centre of African Studies (EXCAS).
    10. Kechagia, Polyxeni & Metaxas, Theodore, 2020. "Institutional quality and FDI inflows: an empirical investigation for Turkey," MPRA Paper 104309, University Library of Munich, Germany.
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    12. Warren Moraghen & Boopen Seetanah & Noor Sookia, 2021. "Impact of exchange rate and exchange rate volatility on foreign direct investment inflow for Mauritius: A dynamic time series approach," African Development Review, African Development Bank, vol. 33(4), pages 581-591, December.

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