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Determinants of Foreign Direct Investment Inflows in Southern African Development Community (SADC) Member Countries

Khamis Hamad Ali, Suleiman Malik Faki and Salim Hamad Suleiman

International Journal of Science and Business, 2018, vol. 2, issue 4, 616-623

Abstract: We examined the determinants of Foreign Direct Investment Inflows in SADC member countries. The study employed Pooled OLS as the main estimation method and using data from the period 1995–2016. Our results revealed that infrastructure, trade openness and market size are positive and significant determinants of FDI inflows in SADC Countries. Results support the previous theory like Hecksehel-Ohlin (1933) and eclectic paradigm or OLI framework developed by Dunning (1980). However, human capital has positive insignificant and inflation has negative significant with FDI inflows for the SADC member countries. Therefore, SADC countries should promote trade agreements to facilitate exportation which has linked with industrial sectors, In addition, SADC countries should reform investment policy to attract more foreign inflow into SADC countries in the long run. The availability and reliability of the good infrastructure of attract many investors to invest in the region

Keywords: Foreign Direct Investment (FDI); Determinants; SADC; foreign inflow; Pooled OLS (search for similar items in EconPapers)
Date: 2018
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Handle: RePEc:aif:journl:v:2:y:2018:i:4:p:616-623