The effects of FDI on economic growth in Africa

Addis Yimer

The Journal of International Trade & Economic Development, 2023, vol. 32, issue 1, 2-36

Abstract: This paper investigates the growth effects of FDI in Africa for the period 1990–2016 using a dynamically common correlated effect approach for an error-correction model. It uses an analytical classification of African economies, with each being fragile, factor-driven or investment-driven. It also accounts for interaction effects and the problem of cross-sectional dependence that previous studies overlooked. While the long-run effect of FDI on growth is significantly positive in investment- and factor-driven economies, its short-run effect is insignificant in the latter type of economies. The effect of FDI on growth is insignificant in the fragile category both in the short-run and long-run, however.

Date: 2023
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Citations: View citations in EconPapers (7)

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DOI: 10.1080/09638199.2022.2079709

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