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The effects of FDI on economic growth in Africa

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  • Addis Yimer

Abstract

This paper investigates the growth effects of FDI in Africa for the period 1990–2016 using a dynamically common correlated effect approach for an error-correction model. It uses an analytical classification of African economies, with each being fragile, factor-driven or investment-driven. It also accounts for interaction effects and the problem of cross-sectional dependence that previous studies overlooked. While the long-run effect of FDI on growth is significantly positive in investment- and factor-driven economies, its short-run effect is insignificant in the latter type of economies. The effect of FDI on growth is insignificant in the fragile category both in the short-run and long-run, however.

Suggested Citation

  • Addis Yimer, 2023. "The effects of FDI on economic growth in Africa," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 32(1), pages 2-36, January.
    • Handle: RePEc:taf:jitecd:v:32:y:2023:i:1:p:2-36
    DOI: 10.1080/09638199.2022.2079709
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    Cited by:

    1. Wu, Zihao & Gao, Jun & Xu, Hui & Shi, Guanqun & Zaidan, Amal Mousa & Ageli, Mohammed Moosa, 2023. "Visualizing symmetric and asymmetric settings in MMQR for natural resources extraction and economic performance: A COVID-19 perspective," Resources Policy, Elsevier, vol. 85(PB).
    2. Jiahao Shen & Runze Liu & Yanling Lin & Ridwan Lanre Ibrahim, 2023. "Technological advancement and regulatory quality," African Development Review, African Development Bank, vol. 35(4), pages 336-350, December.
    3. Avisha Malik & Ash Narayan Sah, 2023. "Does FDI Impact the Economic Growth of BRICS Economies? Evidence from Bayesian VAR," JRFM, MDPI, vol. 17(1), pages 1-20, December.

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