IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this paper

On Geography and Institutions as Determinants of Foreign Direct Investment. A cross country comparative analysis of sub-Saharan African relative to developing countries

Listed author(s):
  • Felix Paul Meier zu Selhausen


    (Cátedra de Cooperación Internacional y con Iberoamérica (COIBA), Universidad de Cantabria)

This work explores what factors determine foreign direct investment (FDI) in sub-Sahara Africa (SSA) relative to non-sub-Saharan African countries, using a panel data set which encompasses most of the world´s developing countries between 1997 and 2006. The results indicate that institutions and infrastructure development promoted FDI to non-SSA but did not induce FDI to sub-Saharan Africa. Geography played a modest and indirect role. The marginal benefit from openness to trade was higher for SSA, which is closely related to resource-seeking FDI that did not translate into sustained economic growth, neither institutional change, but consequently crowded out the second FDI wave of manufacturing. At the same time, FDI into value-added manufacturing largely located in non-SSA countries acted as engine for scaling the economic development ladder through institutional improvement for a number of non-SSA countries. Hence, FDI has the potential to act as a reliable and equitable driver of sustained economic development and poverty alleviation. The destiny of the “resource curse” linked to FDI failure marks the novelty of this paper in the FDI and development literature.

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.

File URL:
Download Restriction: no

Paper provided by Cátedra de Cooperación Internacional y con Iberoamérica (COIBA), Universidad de Cantabria in its series Documentos de trabajo sobre cooperación y desarrollo with number 200906.

in new window

Date of creation: Dec 2009
Handle: RePEc:cci:wpaper:200906
Contact details of provider: Web page:

More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

in new window

  1. Luiz de Mello, 1997. "Foreign direct investment in developing countries and growth: A selective survey," Journal of Development Studies, Taylor & Francis Journals, vol. 34(1), pages 1-34.
  2. Magnus Blomstrom & Robert E. Lipsey & Mario Zejan, 1992. "What Explains Developing Country Growth?," NBER Working Papers 4132, National Bureau of Economic Research, Inc.
  3. W. A. Naude & W. F. Krugell, 2007. "Investigating geography and institutions as determinants of foreign direct investment in Africa using panel data," Applied Economics, Taylor & Francis Journals, vol. 39(10), pages 1223-1233.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:cci:wpaper:200906. 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: (David G. Sobrao)

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.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.