What Drives Foreign Direct Investment in Africa? An Empirical Investigation with Panel Data

Abdoul’ Ganiou Mijiyawa

African Development Review, 2015, vol. 27, issue 4, 392-402

Abstract: type="main" xml:lang="en">

This paper analyzes factors that drive foreign direct investment (FDI) in Africa. To do so, for the first time in the literature, the paper uses 5-year panel data and the system-GMM technique over the period 1970–2009. The main results are as follows: (a) larger countries attract more FDI; (b) regardless of their size, however, more open countries, politically stable countries, and countries offering higher return to investment also attract FDI; (c) FDI inflows are persistent in Africa. This suggests that countries that manage to attract FDI today are likely to attract more FDI in the future.

Date: 2015
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