Impact of foreign direct investment on economic growth in CEMAC region: an analysis of transmission mechanisms

Bruno Emmanuel Ongo Nkoa

International Journal of Sustainable Economy, 2014, vol. 6, issue 4, 303-326

Abstract: The aims of this paper are firstly to access the contribution of foreign direct investment (FDI) to economic growth in countries of the countries CEMAC region, and secondly to show how these foreign investments contribute to the growth of the CEMAC. The basic theory is that of endogenous growth. The econometrical study is based on the work of Alaya et al. (2009) and Borensztein et al. (1998). This model also includes the channels through which FDI influences growth. The study covers the period 1980 to 2010. All CEMAC countries are considered. To estimate the model, the author has used the method of double least squares and the generalised method moment. The results show that FDI affect growth in all CEMAC countries except Congo. The means by which the realisation of their influence differs from one country to another but globally, the channels through which FDI influences growth are labour and human capital. The main recommendation of the study is to promote economic and structural policies to modernise the economies of CEMAC.

Keywords: foreign direct investment; FDI; economic growth; human capital; CEMAC; panel data; transmission mechanisms; sustainability; sustainable development; sustainable economies; domestic investment; financial sector development; international economics; Central Africa; endogenous growth; GMM; generalised method of moments; double least squares; labour; economic policies; structural policies. (search for similar items in EconPapers)
Date: 2014
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