 Working Paper 136 - Determinants of Foreign Direct Investment Inflows to Africa, 1980-2007Working Paper Series from African Development Bank Abstract: The central concern of this paper is to respond to the question: what determines FDI inflows to Africa? An understanding of such factors will assist African policymakers to formulate and execute policies for attracting FDI. Our estimation results from a panel of seven five-year non-overlapping windows for the period 1980-2007 indicate that: (i) there is a positive relationship between market size and FDI inflows; (ii) openness to trade has a positive impact on FDI flows; (iii) higher financial development has negative effect on FDI inflows; (iv) high government consumption expenditure attracts FDI inflows to Africa; (v) higher FDI goes where international remittances also goes in Africa; (vi) agglomeration has a strong positive impact on FDI inflows to Africa; (vii) natural resource endowment and exploitation (especially for oil) attracts huge FDI into Africa; (viii) East and Southern African sub-regions appear positively disposed to obtain higher levels of inward FDI. The key policy implications are discussed. Date: 2011-09-19 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:adb:adbwps:327 Access Statistics for this paper More papers in Working Paper Series from African Development Bank African Development Bank Group, Avenue Joseph Anoma, 01 BP 1387 Abidjan 01, Côte d'Ivoire. Contact information at EDIRC. |
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