The Impact of Infrastructure development on Foreign Direct Investment in Cameroon

Stéphane Mbiankeu Nguea ()
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Stéphane Mbiankeu Nguea: Université de Dschang

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Abstract: Better access to improved infrastructure services is one of the components of a favourable investment climate for foreign investors and an important engine for sustainable economic growth. The purpose of this study was to investigate the effects of communication, energy and transport infrastructures development on Foreign Direct Investment (FDI) in Cameroon. This study employs autoregressive distributed lag (ARDL) approach to cointegration and an error correction model based on ARDL approach using time series data for the period 1984-2014. The results revealed that communication infrastructure has a positive and significant impact on FDI in both the long run and the short run. Findings also revealed a negative impact of energy infrastructure in attracting FDI in the long run and in the short run while an insignificant impact of transport infrastructure on FDI is registered in both the long run and the short run. The results suggest that the improvement of business climate trough better infrastructures play a major role in attracting FDI in Cameroon.

Keywords: ARDL; FDI; Cameroon JEL Classification: H41; R42; F21; E22; Infrastructure (search for similar items in EconPapers)
Date: 2020-01-23
New Economics Papers: this item is included in nep-env, nep-int and nep-tre
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