Impact of Foreign Direct Investment (FDI) on Economic Growth in Congo

Prof. B. Husain ()

Journal of Developing Economies, 2024, vol. 6, issue 1, 25 - 35

Abstract: Purpose: The aim of the study was to assess the impact of foreign direct investment (FDI) on economic growth in Congo. Methodology: This study adopted a desk methodology. A desk study research design is commonly known as secondary data collection. This is basically collecting data from existing resources preferably because of its low cost advantage as compared to a field research. Our current study looked into already published studies and reports as the data was easily accessed through online journals and libraries. Findings: Foreign Direct Investment (FDI) has been widely studied for its impact on economic growth, with research suggesting both positive and nuanced effects. On one hand, FDI inflows can stimulate economic growth by providing access to capital, technology, and managerial expertise, which may enhance productivity and efficiency in the host country's industries. Additionally, FDI often fosters job creation and facilitates knowledge transfer, contributing to human capital development and skill enhancement within the workforce. Moreover, it can promote competition and innovation, driving overall economic dynamism. However, the relationship between FDI and economic growth is contingent upon various factors such as the quality of institutions, regulatory environment, infrastructure, and host country policies. Weak institutional frameworks or inadequate infrastructure may hinder the full realization of FDI benefits. Additionally, there are concerns about the potential for FDI to exacerbate income inequality and exploit natural resources, especially in developing countries. Thus, while FDI generally presents opportunities for economic growth, its impact is multifaceted and context-dependent, requiring careful consideration of host country conditions and policy frameworks. Implications to Theory, Practice and Policy: Dependency theory, neoclassical growth theory and institutional theory may be use to anchor future studies on assessing the impact of foreign direct investment (FDI) on economic growth in Congo. Enhance investment promotion efforts to attract quality FDI inflows that align with the development objectives of host countries. Develop targeted industrial policies that encourage FDI inflows into strategic sectors with the potential to catalyze economic diversification and structural transformation

Keywords: Foreign; Direct Investment (FDI); Economic Growth (search for similar items in EconPapers)
Date: 2024
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