IDEAS home Printed from https://ideas.repec.org/a/hur/ijarbs/v5y2015i12p39-57.html
   My bibliography  Save this article

Foreign Direct Investment in Anglophone and Francophone African Countries

Author

Listed:
  • Yapatake Kossele Thales Pacific

Abstract

Foreign Direct Investment plays a very significant role both in the economic and social development of a country. Its potential benefits to developing countries has increased in recent years. The main objective of this paper is to examine the determinants which can attract or deter Foreign Direct investment in Anglophone and Francophone African countries. We used Panel Data from 37 countries covering the period 2004-2012. Results from a Hausman test indicated that the Random effect model is appropriate in performing the estimation. The regression results show the strength to protect investors, the time required to start business, human resources, domestic credit to private sector have significant influence on FDI. We also employ interactive variables, allowing for interaction effect between time required to start a business and strength to protect investors. Further, interaction effect is allowed between electricity production and economic growth. The results indicate that the interactive variables have a great influence on FDI inflows to these countries. Electricity production is still a big challenge for most Anglophone and francophone countries. We suggest that African governments should direct their efforts towards production of power in order to maintain the long- run sustainability of FDI in Anglophone and Francophone African countries.

Suggested Citation

  • Yapatake Kossele Thales Pacific, 2015. "Foreign Direct Investment in Anglophone and Francophone African Countries," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 5(12), pages 39-57, December.
    • Handle: RePEc:hur:ijarbs:v:5:y:2015:i:12:p:39-57
    as

    Download full text from publisher

    File URL: http://hrmars.com/hrmars_papers/Foreign_Direct_Investment_in_Anglophone_and_Francophone_African_Countries1.pdf
    Download Restriction: no
    File URL: http://hrmars.com/hrmars_papers/Foreign_Direct_Investment_in_Anglophone_and_Francophone_African_Countries1.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Yohane Khamfula, 2007. "Foreign Direct Investment and Economic Growth in EP and IS Countries: The Role of Corruption," The World Economy, Wiley Blackwell, vol. 30(12), pages 1843-1854, December.
    2. Nunnenkamp, Peter & Spatz, Julius, 2003. "Foreign direct investment and economic growth in developing countries: how relevant are host-country and industry characteristics?," Kiel Working Papers 1176, Kiel Institute for the World Economy (IfW Kiel).
    3. Dupasquier, Chantal & Osakwe, Patrick N., 2006. "Foreign direct investment in Africa: Performance, challenges, and responsibilities," Journal of Asian Economics, Elsevier, vol. 17(2), pages 241-260, April.
    4. Koji Miyamoto, 2008. "Human capital formation and foreign direct: Investment in developing countries," OECD Journal: General Papers, OECD Publishing, vol. 2008(1), pages 1-40.
    5. repec:bla:devpol:v:22:y:2004:i:1:p:41-48 is not listed on IDEAS
    6. Linda Cotton & Vijaya Ramachandran, 2001. "Foreign Direct Investment in Emerging Economies: Lessons from Sub-Saharan Africa," WIDER Working Paper Series DP2001-82, World Institute for Development Economic Research (UNU-WIDER).
    7. Felix Paul Meier zu Selhausen, 2009. "On Geography and Institutions as Determinants of Foreign Direct Investment. A cross country comparative analysis of sub-Saharan African relative to developing countries," Documentos de trabajo sobre cooperación y desarrollo 200906, Cátedra de Cooperación Internacional y con Iberoamérica (COIBA), Universidad de Cantabria.
    8. Timothy J. Goodspeed & Jorge Martinez-Vazquez & Li Zhang, 2006. "Attracting FDI: Are Other Government Policies More Important than Taxation in Attracting FDI?," Economics Working Paper Archive at Hunter College 414, Hunter College Department of Economics.
    9. John C. Anyanwu, 2012. "Why Does Foreign Direct Investment Go Where It Goes?: New Evidence From African Countries," Annals of Economics and Finance, Society for AEF, vol. 13(2), pages 425-462, November.
    10. Yapatake Kossele Thales Pacific, 2015. "Foreign Direct Investment in Anglophone and Francophone African Countries," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 5(11), pages 337-350, November.
    11. Roghieh Gholami & Sang‐Yong Tom Lee & Almas Heshmati, 2006. "The Causal Relationship Between Information and Communication Technology and Foreign Direct Investment," The World Economy, Wiley Blackwell, vol. 29(1), pages 43-62, January.
    12. Mesghena Yasin, 2005. "Official Development Assistance and Foreign Direct Investment Flows to Sub‐Saharan Africa," African Development Review, African Development Bank, vol. 17(1), pages 23-40.
    13. James R. Markusen, 2021. "Contracts, intellectual property rights, and multinational investment in developing countries," World Scientific Book Chapters, in: BROADENING TRADE THEORY Incorporating Market Realities into Traditional Models, chapter 8, pages 159-174, World Scientific Publishing Co. Pte. Ltd..
    14. Anthony Kyereboah-Coleman & Kwame F. Agyire-Tettey, 2008. "Effect of exchange-rate volatility on foreign direct investment in Sub-Saharan Africa: The case of Ghana," Journal of Risk Finance, Emerald Group Publishing, vol. 9(1), pages 52-70, January.
    15. Christian Daude & Ernesto Stein, 2007. "The Quality Of Institutions And Foreign Direct Investment," Economics and Politics, Wiley Blackwell, vol. 19(3), pages 317-344, November.
    16. W. Krugell, 2005. "The Determinants of Foreign Direct Investment in Africa," Contributions to Economics, in: Bernard Michael Gilroy & Thomas Gries & Willem A. Naudé (ed.), Multinational Enterprises, Foreign Direct Investment and Growth in Africa, chapter 3, pages 49-71, Springer.
    17. Mohsin Habib & Leon Zurawicki, 2002. "Corruption and Foreign Direct Investment," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 33(2), pages 291-307, June.
    18. Disdier, Anne-Celia & Mayer, Thierry, 2004. "How different is Eastern Europe? Structure and determinants of location choices by French firms in Eastern and Western Europe," Journal of Comparative Economics, Elsevier, vol. 32(2), pages 280-296, June.
    19. Khalid Sekkat & Marie‐Ange Veganzones‐Varoudakis, 2007. "Openness, Investment Climate, and FDI in Developing Countries," Review of Development Economics, Wiley Blackwell, vol. 11(4), pages 607-620, November.
    20. Kinda, Tidiane, 2010. "Investment Climate and FDI in Developing Countries: Firm-Level Evidence," World Development, Elsevier, vol. 38(4), pages 498-513, April.
    21. Xose Rodriguez & Julio Pallas, 2008. "Determinants of foreign direct investment in Spain," Applied Economics, Taylor & Francis Journals, vol. 40(19), pages 2443-2450.
    22. Ana Cuadros & Vicente Orts & Maite Alguacil, 2004. "Openness and Growth: Re-Examining Foreign Direct Investment, Trade and Output Linkages in Latin America," Journal of Development Studies, Taylor & Francis Journals, vol. 40(4), pages 167-192.
    23. Alsan, Marcella & Bloom, David E. & Canning, David, 2006. "The effect of population health on foreign direct investment inflows to low- and middle-income countries," World Development, Elsevier, vol. 34(4), pages 613-630, April.
    24. Timothy Goodspeed & Jorge Martinez-Vazquez & JLi Zhang, 2006. "Are Government Policies More Important Than Taxation in Attracting FDI," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0614, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    25. Marcella Alsan & David E. Bloom & David Canning, 2004. "The Effect of Population Health on Foreign Direct Investment," NBER Working Papers 10596, National Bureau of Economic Research, Inc.
    26. Ghosh Roy Atrayee & Van den Berg Hendrik F, 2006. "Foreign Direct Investment and Economic Growth: A Time-Series Approach," Global Economy Journal, De Gruyter, vol. 6(1), pages 1-21, February.
    27. Willem Naudé, 2005. "Geography and Economy in South Africa and its Neighbours," Journal of African Economies, Centre for the Study of African Economies, vol. 14(2), pages 318-320, June.
    28. Yanling Wang, 2012. "Openness and Productivity: The Role of Imports, FDI and International Telecommunications," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 49(1), pages 125-145, May.
    29. Kevin Honglin Zhang, 2001. "What Attracts Foreign Multinational Corporations To China?," Contemporary Economic Policy, Western Economic Association International, vol. 19(3), pages 336-346, July.
    30. Bernard Michael Gilroy & Thomas Gries & Willem A. Naudé (ed.), 2005. "Multinational Enterprises, Foreign Direct Investment and Growth in Africa," Contributions to Economics, Springer, number 978-3-7908-1610-5, March.
    31. Baharom, A.H. & Habibullah, M.S. & Royfaizal, R. C, 2008. "The relationship between trade openness, foreign direct investment and growth: Case of Malaysia," MPRA Paper 11928, University Library of Munich, Germany.
    32. Marcelo Braga Nonnemberg & Mario Jorge Cardoso de Mendonça, 2004. "The Determinants Of Foreign Direct Investment In Developing Countries," Anais do XXXII Encontro Nacional de Economia [Proceedings of the 32nd Brazilian Economics Meeting] 061, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    33. Reiter, S.L. & Steensma, H. Kevin, 2010. "Human Development and Foreign Direct Investment in Developing Countries: The Influence of FDI Policy and Corruption," World Development, Elsevier, vol. 38(12), pages 1678-1691, December.
    34. Imad A. Moosa, 2002. "Foreign Direct Investment," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-4039-0749-3, December.
    Full references (including those not matched with items on IDEAS)

    Citations

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


    Cited by:

    1. Yapatake Kossele Thales Pacific, 2015. "Foreign Direct Investment in Anglophone and Francophone African Countries," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 5(11), pages 337-350, November.
    2. Yapatake Kossele Thales Pacific, 2017. "Slow Growth of Foreign Direct Investment in Central African Republic," Global Business Review, International Management Institute, vol. 18(6), pages 1435-1446, December.
    3. Pacific K. T. Yapatake, 2017. "The Slow growth of Foreign Direct Investment in Central African Republic," CEREDEC Working Papers 17/001, Centre de Recherche pour le Développement Economique (CEREDEC).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. John C. Anyanwu, 2012. "Why Does Foreign Direct Investment Go Where It Goes?: New Evidence From African Countries," Annals of Economics and Finance, Society for AEF, vol. 13(2), pages 425-462, November.
    2. John Anyanwu, 2011. "Working Paper 136 - Determinants of Foreign Direct Investment Inflows to Africa, 1980-2007," Working Paper Series 327, African Development Bank.
    3. Olawumi D Awolusi & Theuns G Pelser & Adedeji Saidi Adelekan, 2016. "Determinants of Foreign Direct Investment: New Granger Causality Evidence from Asian and African Economies," Journal of Economics and Behavioral Studies, AMH International, vol. 8(1), pages 104-119.
    4. Olawumi Dele Awolusi, 2019. "Policy and Non-Policy Factors: What Determines Foreign Direct Investments in Africa?," Journal of Social and Development Sciences, AMH International, vol. 9(4), pages 49-61.
    5. Kimiagari, Salman & Mahbobi, Mohammad & Toolsee, Tushika, 2023. "Attracting and retaining FDI: Africa gas and oil sector," Resources Policy, Elsevier, vol. 80(C).
    6. Makun, Keshmeer Kanewar, 2016. "Direct Foreign Investment and its Determinants: A Case Study - Gli investimenti diretti esteri e loro determinanti : studio di un caso," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 69(2), pages 151-174.
    7. Victor, Kidake, 2018. "Infrastructure and Foreign Direct Investment in Kenya: A Time Series Analysis 1980-2015," MPRA Paper 98014, University Library of Munich, Germany.
    8. Oro, Oro Ufuo & Alagidede, Imoptep Paul, 2021. "Does petroleum resources or market size drive foreign direct investment in Africa? New evidence from time-series analysis," Resources Policy, Elsevier, vol. 71(C).
    9. Toure Mamoudou & Cédric Achille Mbeng Mezui, 2017. "Working Paper 271 - Facteurs déterminants des IDE en Afrique," Working Paper Series 2388, African Development Bank.
    10. Godfred William Cantah & Gabriel William Brafu-Insaidoo & Emmanuel Agyapong Wiafe & Abass Adams, 2018. "FDI and Trade Policy Openness in Sub-Saharan Africa," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 44(1), pages 97-116, January.
    11. Akinleye Simeon Oludiran & Laleye Nicaise Abimbola, 2018. "Major Determinants of Foreign Direct Investment in the West African Economic and Monetary Region," Iranian Economic Review (IER), Faculty of Economics,University of Tehran.Tehran,Iran, vol. 22(1), pages 121-162, Winter.
    12. Bouchoucha, Najeh & Yahyaoui, Ismahen, 2019. "Governance and Foreign Direct Investment : A comparative Analysis between Low and Middle Income African Countries," MPRA Paper 95944, University Library of Munich, Germany.
    13. Anselm Komla Abotsi & Tongyai Iyavarakul, 2015. "Tolerable Level of Corruption for Foreign Direct Investment in Africa," Contemporary Economics, University of Economics and Human Sciences in Warsaw., vol. 9(3), September.
    14. Wasseem Mina, 2018. "Labor Market Policies and FDI Flows to GCC Countries," Working Papers 1201, Economic Research Forum, revised 27 May 2018.
    15. Federico Carril-Caccia & Juliette Milgram-Baleix & Jordi Paniagua, 2019. "Foreign Direct Investment in oil-abundant countries: The role of institutions," PLOS ONE, Public Library of Science, vol. 14(4), pages 1-23, April.
    16. Simplice Asongu & Enowbi Batuo & Vanessa Tchamyou, 2015. "Bundling Governance: Finance versus Institutions in Private Investment Promotion," Working Papers of the African Governance and Development Institute. 15/051, African Governance and Development Institute..
    17. Asongu, Simplice & Nwachukwu, Jacinta, 2015. "Drivers of FDI in Fast Growing Developing Countries: Evidence from Bundling and Unbundling Governance," MPRA Paper 67294, University Library of Munich, Germany.
    18. Simplice A. Asongu & Joseph Nnanna & Vanessa S. Tchamyou, 2020. "Finance, Institutions and Private Investment in Africa," Working Papers of the African Governance and Development Institute. 20/080, African Governance and Development Institute..
    19. Simplice Asongu & Christian Nguena, 2014. "Equitable and Sustainable Development of Foreign Land Acquisitions: Lessons, Policies and Implications," Working Papers of the African Governance and Development Institute. 14/038, African Governance and Development Institute..
    20. Cicatiello, Lorenzo & De Simone, Elina & Ercolano, Salvatore & Gaeta, Giuseppe Lucio, 2021. "Assessing the impact of fiscal transparency on FDI inflows," Socio-Economic Planning Sciences, Elsevier, vol. 73(C).

    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:hur:ijarbs:v:5:y:2015:i:12:p:39-57. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: Hassan Danial Aslam (email available below). General contact details of provider: http://hrmars.com/index.php/pages/detail/IJARBSS .

    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.