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A Dynamic Panel Analysis of the Determinants of FDI in Africa

Author

Listed:
  • Md. Sharif Hossain

    () (University of Dhaka)

  • Rajarshi Mitra

    () (Kyushu University)

Abstract

Numerous studies have examined the determinants of FDI. However, due to sample selection and research methodology, there continues to be mixed and inconclusive evidence of both the significance and direction of impact of changes in the determinants on FDI. We apply the GMM technique to dynamic panel analysis and identify the determinants of FDI (in proportion to GDP) for 35 African countries for the period 1974-2009. Granger causality indicates short-run causal effects from domestic investment, external debt and government spending to FDI. Johansen cointegration test indicates significantly positive long-run effects of domestic investment and trade openness on FDI.

Suggested Citation

  • Md. Sharif Hossain & Rajarshi Mitra, 2013. "A Dynamic Panel Analysis of the Determinants of FDI in Africa," Economics Bulletin, AccessEcon, vol. 33(2), pages 1606-1614.
  • Handle: RePEc:ebl:ecbull:eb-13-00251
    as

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    File URL: http://www.accessecon.com/Pubs/EB/2013/Volume33/EB-13-V33-I2-P150.pdf
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    References listed on IDEAS

    as
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    Cited by:

    1. Md. Sharif Hossain & Rajarshi Mitra & Md. Iqbal Hossain, 2018. "The Determinants of Inbound FDI: Asia on a Reappraisal," Economics Bulletin, AccessEcon, vol. 38(4), pages 2500-2508.

    More about this item

    Keywords

    Panel unit root tests; Panel cointegration tests; Panel Granger causality tests;

    JEL classification:

    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance

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