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What is Driving Private Investment Growth in Africa? New Evidence from Firm-Level Panel Data

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  • Christian S. Otchia

    (Nagoya University)

Abstract

We investigate the drivers of private investment in Africa over the period 2002–2018 using a newly constructed firm-level panel data. We document several sources of evidence that together show profitability plays a smaller role in explaining private investment. The effect of value added to capital appears larger. Decomposing our findings by industries, we find that value added plays a more important role in investment growth in the food processing and other manufacturing sectors. Finally, we show that investment in the service sector has been growing even in countries with a poor business environment.

Suggested Citation

  • Christian S. Otchia, 2025. "What is Driving Private Investment Growth in Africa? New Evidence from Firm-Level Panel Data," Journal of Industry, Competition and Trade, Springer, vol. 25(1), pages 1-28, December.
    • Handle: RePEc:kap:jincot:v:25:y:2025:i:1:d:10.1007_s10842-025-00444-x
    DOI: 10.1007/s10842-025-00444-x
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