A Big Data Approach to Understand Sub-national Determinants of FDI in Africa

A. Fronzetti Colladon, R. Vestrelli, S. Bait and M. M. Schiraldi

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Abstract: Various macroeconomic and institutional factors hinder FDI inflows, including corruption, trade openness, access to finance, and political instability. Existing research mostly focuses on country-level data, with limited exploration of firm-level data, especially in developing countries. Recognizing this gap, recent calls for research emphasize the need for qualitative data analysis to delve into FDI determinants, particularly at the regional level. This paper proposes a novel methodology, based on text mining and social network analysis, to get information from more than 167,000 online news articles to quantify regional-level (sub-national) attributes affecting FDI ownership in African companies. Our analysis extends information on obstacles to industrial development as mapped by the World Bank Enterprise Surveys. Findings suggest that regional (sub-national) structural and institutional characteristics can play an important role in determining foreign ownership.

Date: 2024-03
New Economics Papers: this item is included in nep-afr, nep-big, nep-fdg and nep-int
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