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A regional perspective on Aid and FDI in Southern Africa

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  • Henri Bezuidenhout

Abstract

During the last decade international aid flows diminished while Africa’s relative share of global foreign direct investment (FDI) declined. This went together with lacklustre growth and low human development levels. In 2005, the G8 countries announced that they would increase aid to Africa by some $25 billion per annum. The pledge for increasing aid seems to have triggered an extensive debate about the role of aid and other international capital flows in the development of poorer countries. This study contributes to this debate. Specifically it addresses the role of foreign direct investment and aid to growth and human development. Panel estimations are used to determine the relationships between aid, FDI and growth in the Southern Africa region from 1990 to 2005. Negative relationships are found between FDI and growth while aid and growth turned out to be unrelated.

Suggested Citation

  • Henri Bezuidenhout, 2009. "A regional perspective on Aid and FDI in Southern Africa," Working Papers 147, Economic Research Southern Africa.
  • Handle: RePEc:rza:wpaper:147
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Khan, Shiraz & Mehboob, Farhan, 2014. "Impact of FDI on GDP: An Analysis of Global Economy on Production Function," MPRA Paper 55352, University Library of Munich, Germany.
    2. Carike Claassen & Elsabé Loots & Henri Bezuidenhout, 2011. "Chinese Foreign Direct Investment in Africa," Working Papers 261, Economic Research Southern Africa.
    3. repec:eee:riibaf:v:41:y:2017:i:c:p:434-444 is not listed on IDEAS
    4. Sibanjan Mishra, 2016. "Macro-economic factors and foreign direct investment in India: a Toda Yamamoto causality approach," International Journal of Economics and Business Research, Inderscience Enterprises Ltd, vol. 11(3), pages 195-208.
    5. Hasanat Shah, Syed & He, Bin & Li, Junjiang, 2011. "The Causality and Economic Impact of FDI inflows from Trade Partners in Pakistan," MPRA Paper 35645, University Library of Munich, Germany.

    More about this item

    Keywords

    Foreign direct investment (FDI); Aid; SACU; SADC; South Africa; Growth; Human capital development; Regional integration;

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F35 - International Economics - - International Finance - - - Foreign Aid
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations

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