FOREIGN DIRECT INVESTMENT IN SUB‐SAHARAN AFRICA: CHANGING LOCATION‐SPECIFIC ADVANTAGES AS SIGNALS OF COMPETITIVENESS

Frank L. Bartels, Markus Eicher, Christopher Bachtrog and Gorazd Rezonja

The Developing Economies, 2009, vol. 47, issue 3, 244-278

Abstract: This paper uses longitudinal factor analysis of location‐specific advantages that are relevant to the foreign direct investment decisions of multinational enterprises (MNEs) in sub‐Saharan Africa (SSA) to signal changes in location competitiveness. A total of 1,216 responses by MNEs to a survey in 15 SSA countries are analyzed. We find that, first, over a three‐year period (2002–5), MNEs perceive a positive change in the market‐servicing environment in SSA. Second, MNEs find negative changes in SSA regarding the availability of input factors and characteristics of market demand.

Date: 2009
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