EconPapers    
Economics at your fingertips  
 

The role of value added across economic sectors in modulating the effects of FDI on TFP and economic growth dynamics

Simplice Asongu, Christelle Meniago and Raufhon Salahodjaev

International Journal of Emerging Markets, 2022, vol. 18, issue 11, 5087-5108

Abstract: Purpose - This study investigates (1) the effect of foreign direct investment (FDI) on total factor productivity (TFP) and economic growth dynamics and (2) the relevance of value added from three economic sectors in modulating the established effect of FDI on TFP and economic growth dynamics. Design/methodology/approach - The geographical and temporal scopes are respectively 25 Sub-Saharan African countries and the period 1980–2014. The empirical evidence is based on non-interactive and interactive generalised method of moments. Findings - The following main findings are established. First, FDI has a positive effect on gross domestic product (GDP) growth, GDP per capita and welfare real TFP. Second, the effect of FDI is negative on real GDP and TFP while the impact is insignificant on real TFP growth and welfare TFP. Third, values added to the three economic sectors largely modulate FDI to produce negative net effects on TFP and growth dynamics. Practical implications - Policy implications are discussed with particular emphasis on the need to complement added value across various economic sectors in order to leverage on the benefits of FDI in TFP and economic growth. Originality/value - To the best of the authors’ knowledge, this is the first study to assess how value added from various economic sectors affect the relevance of FDI on macroeconomic outcomes.

Keywords: Economic output; Total factor productivity; Foreign investment; Agricultural sector; Manufacturing sector; Service sector; Sub-Saharan Africa; E23; F21; F30; F43; O55 (search for similar items in EconPapers)
Date: 2022
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (text/html)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (application/pdf)
Access to full text is restricted to subscribers

Related works:
Working Paper: The role of value added across economic sectors in modulating the effects of FDI on TFP and economic growth dynamics (2021) Downloads
Working Paper: The role of value added across economic sectors in modulating the effects of FDI on TFP and economic growth dynamics (2021) Downloads
Working Paper: The role of value added across economic sectors in modulating the effects of FDI on TFP and economic growth dynamics (2021) Downloads
Working Paper: The role of value added across economic sectors in modulating the effects of FDI on TFP and economic growth dynamics (2021) Downloads
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:eme:ijoemp:ijoem-10-2018-0547

DOI: 10.1108/IJOEM-10-2018-0547

Access Statistics for this article

International Journal of Emerging Markets is currently edited by Prof Ilan Alon

More articles in International Journal of Emerging Markets from Emerald Group Publishing Limited
Bibliographic data for series maintained by Emerald Support ().

 
Page updated 2025-03-22
Handle: RePEc:eme:ijoemp:ijoem-10-2018-0547