The Spread of and Death from Infectious Diseases in Sub-Saharan Africa: Implications for FDI Attraction

Kazeem Bello Ajide, Qianxiao Zhang, Ridwan Lanre Ibrahim and Syed Ale Raza Shah ()
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Kazeem Bello Ajide: Department of Economics, University of Lagos, Yaba 101017, Lagos State, Nigeria
Qianxiao Zhang: School of Economics & Finance, Xi’an Jiaotong University, Xi’an 710061, China
Ridwan Lanre Ibrahim: Department of Economics, University of Lagos, Yaba 101017, Lagos State, Nigeria
Syed Ale Raza Shah: School of Economics & Finance, Xi’an Jiaotong University, Xi’an 710061, China

IJERPH, 2022, vol. 19, issue 22, 1-20

Abstract: Are “economic bads” of infectious diseases and “economic goods” of foreign direct investment antagonistic to each other? This is the salient question that this research inquiry unravels for 34 African economies from 2000 to 2017. The empirical evidence revealed the following through a generalized method of moments (SGMM) inter alia: First, the mitigating roles of infectious diseases, such as malaria, HIV prevalence rate and AIDS, on global FDI inflows are unconditionally certified from a statistical and economic sense. Second, the diminishing influences of other confounders, such as low per capita GDP, shallow financial development, excruciating inflationary trend, and natural resource rents curse, are empirically endorsed, on the one hand, while the persistent nature of FDI and trade openness as boosting mechanisms for FDI are unambiguously applauded, on the other hand. Finally, a reduction in the numerical strength of the estimates after accounting for the outliers’ effect from the models and the inclusion of additional controls do not diminish the robustness of already established findings, except for the HIV prevalence rate. On the policy front, if the foreign direct investment is truly pro-development outcomes, any policy interventions that eliminate infectious diseases will be Pareto-improving.

Keywords: foreign direct investment; infectious diseases; policy interventions; system-generalized method of moments; Africa (search for similar items in EconPapers)
JEL-codes: I I1 I3 Q Q5 (search for similar items in EconPapers)
Date: 2022
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