Foreign direct investment and institutional adequacy: New granger causality evidence from African countries.
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Authors
Aregbeshola, R.A.
Issue Date
2014
Type
Article
Language
en
Keywords
foreign direct investment , Africa economic development , Regulatory framework , Multinational companies
Alternative Title
Abstract
The strategic importance of foreign direct investment in the contemporary economies has been tremendous.While various countries (developed and developing economies) have benefitted from the direct and spillovereffects of FDI, which range from improved technology and knowledge diffusion through to individual andcorporate capability enhancement, FDI outflow remains largely channelled to the developed countries, andthe rapidly developing countries in Asia and South America. Evidence suggests that the developmentenhancingeffects of FDI are felt more highly in the developing economies, such as economies in Africa.However, FDI inflow to the developing economies has been very low. Using data generated from the AfricanDevelopment Indicators (ADI) between 1980 and 2008 in econometric estimations, this paper finds thatgovernment policies (especially fiscal and monetary policies) play significant roles in facilitating FDI inflow tothe African countries studied. The study thereby suggests an improved regulatory framework to make Africamore attractive to inflow of FDI.
Description
Citation
Aregbeshola, R.A. 2014. Foreign direct investment and institutional adequacy: New granger causality evidence from African countries. South African Journal of Economic and Management Sciences, 17(5): 557-568.
Publisher
South African Journal of Economic and Management Sciences
License
Journal
Volume
Issue
PubMed ID
DOI
ISSN
2222-3436