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Does Foreign Direct Investment Contribute to Poverty Reduction in Cameroon? An ARDL-Bounds Testing Approach

Stéphane Mbiankeu Nguea (), Issidor Noumba () and Armand Gilbert Noula ()
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Stéphane Mbiankeu Nguea: Faculty of Economics and Management, University of Dschang
Issidor Noumba: Faculty of Economics and Management, University of Yaoundé II - Soa
Armand Gilbert Noula: Faculty of Economics and Management, University of Dschang

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Abstract: This paper investigates the impact of Foreign Direct Investment (FDI) on poverty reduction in Cameroon from on the period 1984-2014. Auto Regressive Distributed Lags (ARDL) bounds test approach to co-integration has been applied to analyze the data coming from freedom house and World Development Indicators (WDI). Three poverty reduction proxies namely life expectancy, per capita household consumption expenditure and infant mortality rate are used to capture multidimensional feature of poverty and to increase the robustness of the results. The findings revealed that the impact of FDI to alleviate poverty is less significant in Cameroon as evidenced by one out of three (infant mortality) poverty reduction proxies where a short-run positive impact of FDI on poverty reduction is confirmed. These findings suggest that Cameroon may use FDI as a short-term poverty reduction instrument. JEL Classifications: F21, I30

Keywords: Foreign direct investment; poverty reduction; co-integration; autoregressive distributed lag; Cameroon (search for similar items in EconPapers)
Date: 2020-05-11
New Economics Papers: this item is included in nep-afr and nep-int
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