IDEAS home Printed from https://ideas.repec.org/p/zbw/kcgpps/9.html
   My bibliography  Save this paper

Drivers and extent of foreign direct investment in Sub-Sahara Africa

Author

Listed:
  • Görg, Holger

Abstract

When it comes to attracting foreign direct investment, Africa as a whole may be described as some-thing like the "forgotten continent". In a global comparison, the continent is fairly insignificant as a destination for the investment of foreign companies. This paper makes this point using aggregate data on world-wide FDI stocks. It then tries to explain why this is the case. It first reviews the important drivers of FDI that have been identified in the literature, and then compares the performance of African countries in terms of those determinants with that of other potential host countries.

Suggested Citation

  • Görg, Holger, 2023. "Drivers and extent of foreign direct investment in Sub-Sahara Africa," KCG Policy Papers 9, Kiel Centre for Globalization (KCG).
  • Handle: RePEc:zbw:kcgpps:9
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/272287/1/1849770026.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Adil Suliman & Andre Varella Mollick, 2009. "Human Capital Development, War and Foreign Direct Investment in Sub-Saharan Africa," Oxford Development Studies, Taylor & Francis Journals, vol. 37(1), pages 47-61.
    2. Holger Görg & Eric Strobl, 2015. "Does Corporate Taxation Deter Multinationals? Evidence from a Historic Event in Ireland," The World Economy, Wiley Blackwell, vol. 38(5), pages 788-804, May.
    3. Torfinn Harding & Beata S. Javorcik, 2011. "Roll Out the Red Carpet and They Will Come: Investment Promotion and FDI Inflows," Economic Journal, Royal Economic Society, vol. 121(557), pages 1445-1476, December.
    4. Busse, Matthias & Hefeker, Carsten, 2007. "Political risk, institutions and foreign direct investment," European Journal of Political Economy, Elsevier, vol. 23(2), pages 397-415, June.
    5. Asiedu, Elizabeth & Lien, Donald, 2004. "Capital Controls and Foreign Direct Investment," World Development, Elsevier, vol. 32(3), pages 479-490, March.
    6. Ronald B. Davies & Iulia Siedschlag & Zuzanna Studnicka, 2021. "The impact of taxes on the extensive and intensive margins of FDI," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 28(2), pages 434-464, April.
    7. Tobias Zander, 2021. "Does corruption matter for FDI flows in the OECD? A gravity analysis," International Economics and Economic Policy, Springer, vol. 18(2), pages 347-377, May.
    8. Asiedu, Elizabeth, 2002. "On the Determinants of Foreign Direct Investment to Developing Countries: Is Africa Different?," World Development, Elsevier, vol. 30(1), pages 107-119, January.
    9. Beata S. Javorcik, 2015. "Does FDI Bring Good Jobs to Host Countries?," The World Bank Research Observer, World Bank, vol. 30(1), pages 74-94.
    10. Bruce A. Blonigen & Jeremy Piger, 2019. "Determinants of Foreign Direct Investment," World Scientific Book Chapters, in: Foreign Direct Investment, chapter 1, pages 3-54, World Scientific Publishing Co. Pte. Ltd..
    11. Cleeve, Emmanuel A. & Debrah, Yaw & Yiheyis, Zelealem, 2015. "Human Capital and FDI Inflow: An Assessment of the African Case," World Development, Elsevier, vol. 74(C), pages 1-14.
    12. Noorbakhsh, Farhad & Paloni, Alberto & Youssef, Ali, 2001. "Human Capital and FDI Inflows to Developing Countries: New Empirical Evidence," World Development, Elsevier, vol. 29(9), pages 1593-1610, September.
    13. Thomas Farole, 2011. "Special Economic Zones in Africa : Comparing Performance and Learning from Global Experience," World Bank Publications - Books, The World Bank Group, number 2268, December.
    14. Julian Donaubauer & Birgit E. Meyer & Peter Nunnenkamp, 2016. "A New Global Index of Infrastructure: Construction, Rankings and Applications," The World Economy, Wiley Blackwell, vol. 39(2), pages 236-259, February.
    15. Morisset, Jacques, 2000. "Foreign direct investment in Africa : policies also matter," Policy Research Working Paper Series 2481, The World Bank.
    16. Thomas Farole & Deborah Winkler, 2014. "Making Foreign Direct Investment Work for Sub-Saharan Africa : Local Spillovers and Competitiveness in Global Value Chains," World Bank Publications - Books, The World Bank Group, number 16390, December.
    17. Emmanuel Cleeve, 2008. "How effective are fiscal incentives to attract FDI to Sub-Saharan Africa?," Journal of Developing Areas, Tennessee State University, College of Business, vol. 42(1), pages 135-153, September.
    18. Gui-Diby, Steve Loris & Renard, Mary-Françoise, 2015. "Foreign Direct Investment Inflows and the Industrialization of African Countries," World Development, Elsevier, vol. 74(C), pages 43-57.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. John Anyanwu, 2011. "Working Paper 136 - Determinants of Foreign Direct Investment Inflows to Africa, 1980-2007," Working Paper Series 327, African Development Bank.
    2. Zaneta Kubik, 2023. "The role of agricultural sector performance in attracting foreign direct investment in the food and beverages sector. Evidence from planned investments in Africa," Agribusiness, John Wiley & Sons, Ltd., vol. 39(3), pages 875-903, July.
    3. Madhav Joshi & Jason Michael Quinn, 2020. "Civil war termination and foreign direct investment, 1989–2012," Conflict Management and Peace Science, Peace Science Society (International), vol. 37(4), pages 451-470, July.
    4. Mina, Wasseem, 2020. "Do GCC market-oriented labor policies encourage inward FDI flows?," Research in International Business and Finance, Elsevier, vol. 51(C).
    5. Federico Carril-Caccia & Juliette Milgram-Baleix & Jordi Paniagua, 2019. "Foreign Direct Investment in oil-abundant countries: The role of institutions," PLOS ONE, Public Library of Science, vol. 14(4), pages 1-23, April.
    6. Alsan, Marcella & Bloom, David E. & Canning, David, 2006. "The effect of population health on foreign direct investment inflows to low- and middle-income countries," World Development, Elsevier, vol. 34(4), pages 613-630, April.
    7. Boly Amadou & Seydou Coulibaly & Eric Kéré Nazindigouba, 2019. "Working Paper 310 - Tax Policy, Foreign Direct Investment and Spillover Effects," Working Paper Series 2436, African Development Bank.
    8. Cleeve, Emmanuel A. & Debrah, Yaw & Yiheyis, Zelealem, 2015. "Human Capital and FDI Inflow: An Assessment of the African Case," World Development, Elsevier, vol. 74(C), pages 1-14.
    9. Fosu, Prince, 2016. "Infrastructure and Foreign Direct Investment Inflows: Evidence from Ghana," MPRA Paper 100375, University Library of Munich, Germany, revised 13 May 2020.
    10. Konara, Palitha & Wei, Yingqi, 2019. "The complementarity of human capital and language capital in foreign direct investment," International Business Review, Elsevier, vol. 28(2), pages 391-404.
    11. Maria Borga & Perla Ibarlucea Flores & Monika Sztajerowska, 2020. "Drivers of divestment decisions of multinational enterprises - A cross-country firm-level perspective," OECD Working Papers on International Investment 2019/03, OECD Publishing.
    12. Nikolaos Antonakakis & Gabriele Tondl, 2011. "Do determinants of FDI to developing countries differ among OECD investors? Insights from Bayesian Model Averaging," FIW Working Paper series 076, FIW.
    13. Metaxas, Theodore & Kechagia, Polyxeni, 2016. "Literature review of 100 empirical studies of Foreign Direct Investment: 1950-2015," MPRA Paper 71414, University Library of Munich, Germany.
    14. Nikolaos Antonakakis & Gabriele Tondl, 2015. "Robust determinants of OECD FDI in developing countries: Insights from Bayesian model averaging," Cogent Economics & Finance, Taylor & Francis Journals, vol. 3(1), pages 1095851-109, December.
    15. Gnangnon, Sèna Kimm, 2019. "Trade Policy Space and Foreign Direct Investment Inflows," EconStor Preprints 196149, ZBW - Leibniz Information Centre for Economics.
    16. Federico Carril-Caccia & Juliette Milgram Baleix & Jordi Paniagua, 2019. "The foreign direct investment-institution nexus in oil-abundant countries," Working Papers 1903, Department of Applied Economics II, Universidad de Valencia.
    17. John C. Anyanwu, 2012. "Why Does Foreign Direct Investment Go Where It Goes?: New Evidence From African Countries," Annals of Economics and Finance, Society for AEF, vol. 13(2), pages 425-462, November.
    18. Sèna Kimm Gnangnon, 2022. "Does poverty deter foreign direct investment flows to developing countries?," International Journal of Economic Policy Studies, Springer, vol. 16(1), pages 297-330, February.
    19. Kodila-Tedika, Oasis & Khalifa, Sherif, 2020. "Leaders’ Foreign Travel and Foreign Investment Inflows," MPRA Paper 98625, University Library of Munich, Germany.
    20. Adriana Burlea‐Schiopoiu & Simina Brostescu & Liviu Popescu, 2023. "The impact of foreign direct investment on the economic development of emerging countries of the European Union," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 28(2), pages 2148-2177, April.

    More about this item

    Keywords

    Foreign direct investment; Sub-Sahara Africa; Drivers; Performance;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:kcgpps:9. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: http://www.kcg-kiel.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.