Is foreign direct investment good for the poor? New evidence from African countries

Babajide Fowowe () and Mohammed Shuaibu

Economic Change and Restructuring, 2014, vol. 47, issue 4, 339 pages

Abstract: This paper conducts an empirical investigation of the relationship between foreign direct investment (FDI) inflows and poverty in selected African economies. Using system generalised method of moments, our findings showed that FDI inflows have significantly contributed to poverty reduction in African countries. Our results also showed that better institutional quality and human capital development are associated with reducing poverty. Furthermore, interacting FDI with financial development was found to significantly reduce poverty, thus providing support to the hypothesis that better functioning financial systems enhance the efficiency of FDI in reducing poverty. Copyright Springer Science+Business Media New York 2014

Keywords: Poverty; Foreign direct investment; Africa; Panel data; System and difference GMM; C23; I32; O55; F21 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (54)

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DOI: 10.1007/s10644-014-9152-4

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