Determinants of Foreign Direct Investment in Six Fragile African Economies: Panel Data Modeling

Ibrahim G. Khattab (), Ehab Ebrahim Mohamed Ebrahim (), Awadelkarim Elamin Altahir Ahmed () and Walaa Abdullah Abdullah Albeltagy ()
Additional contact information
Ibrahim G. Khattab: Department of Statistics, Mathematics, and Insurance, Faculty of Business, Alexandria University, Alexandria, Egypt,
Ehab Ebrahim Mohamed Ebrahim: Department of Economics, College of Business, Imam Mohammad Ibn Saud Islamic University (IMSIU), Riyadh, Saudi Arabia,
Awadelkarim Elamin Altahir Ahmed: Department of Economics, College of Business, Imam Mohammad Ibn Saud Islamic University (IMSIU), Riyadh, Saudi Arabia,
Walaa Abdullah Abdullah Albeltagy: Department of Economics, Faculty of Commerce, Mansoura University, Mansoura, Egypt.

International Journal of Energy Economics and Policy, 2026, vol. 16, issue 2, 1105-1112

Abstract: Low-income African countries continue to face persistent political, economic, and environmental challenges that constrain their ability to attract foreign direct investment (FDI). Poverty, institutional weaknesses, and recurrent political instability have deterred investors and limited growth. While the relationship between macroeconomic indicators and FDI has been widely studied, existing research has largely focused on relatively stable regions such as Northern and Southern Africa, leaving fragile economies underexplored. This study addresses this gap by analyzing the determinants of FDI inflows in six low-income African countries over the period 2010-2023. Using annual panel data and panel regression models, the analysis reveals that past inflows of FDI exert a strong persistence effect. In addition, gross domestic product (GDP), inflation, and labor force are found to significantly and positively influence FDI, whereas trade shows no significant impact. These findings provide new insights into the determinants of FDI in fragile African economies and highlight important economic policy directions for enhancing investment attractiveness in these regions.

Keywords: Foreign Direct Investment; Central Africa; Panel Data Analysis; Trade Openness; Inflation; Labor Force; Fragile Economies; Economic Growth; Investment Climate (search for similar items in EconPapers)
Date: 2026
References: Add references at CitEc
Citations:

Downloads: (external link)
https://econjournals.com/index.php/ijeep/article/download/22727/9867 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eco:journ2:v:16:y:2026:i:2:id:22727

Ordering information: This journal article can be ordered from
https://econjournals.com/index.php/ijeep

DOI: 10.32479/ijeep.22727

Access Statistics for this article

More articles in International Journal of Energy Economics and Policy from International Journal of Energy Economics and Policy
Bibliographic data for series maintained by Monica Sinhat ().