Differential Impacts of Economic Volatility and Governance on Manufacturing and Non-Manufacturing Foreign Direct Investments: The Case of US Multinationals in Africa
The focus of this study is to examine the differential impacts of economic volatility and governance on the flows of US manufacturing and non-manufacturing foreign direct investment (FDI) into African economies. A Generalized Autoregressive Heteroscedastic (GARCH) model is used to generate economic volatility indicators for each sample country. Different governance indices have also been used to test the robustness of the findings. The results of the study show that the influence of economic volatility and governance on aggregate US FDI is weak. For the flows of US manufacturing FDI, effects of economic volatility are undetectable; for this sub-sector, investor confidence, government policy commitment, and availability of labor stand out as major determinants. For US non-manufacturing FDI, however, both economic volatilities and governance have significant effects, although only when economic volatilities occur together with bad governance and high debt burden. Other economic factors, such as trade links between host countries and the US, and between host countries and the rest of the world, also boost the flows of both manufacturing and non-manufacturing US FDI in African economies. Eastern Economic Journal (2009) 35, 367–395. doi:10.1057/eej.2008.17
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 35 (2009 Summer)
Issue (Month): 3 ()
|Contact details of provider:|| Web page: http://www.palgrave-journals.com/|
|Order Information:|| Postal: Palgrave Macmillan Journals, Subscription Department, Houndmills, Basingstoke, Hampshire RG21 6XS, UK|
Web: http://www.palgrave-journals.com/pal/subscribe/index.html Email:
When requesting a correction, please mention this item's handle: RePEc:pal:easeco:v:35:y:2009:i:3:p:367-395. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Daniel Foley)
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 references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.