Foreign aid and Foreign direct investment in Sub-Saharan Africa: A panel data analysis
Kafayat Amusa, Nara Monkam, Nicola Viegi
Authors registered in the RePEc Author Service: Nicola Viegi (),
Nara F. Monkam and
Kafayat Amusa ()
No 612, Working Papers from Economic Research Southern Africa
Funding constraints experienced by Sub-Saharan African (SSA) countries has led to reliance on foreign direct investment (FDI) and foreign aid as alternative sources of finance. Despite the importance of FDI for growth, SSA has failed to attract an increasing share of global FDI and at the same time faces volatile aid flows. This study examines the role of foreign aid in enhancing FDI inflows to 31 SSA countries for the period 1995 to 2012. Using panel data estimation techniques, the results suggest that productive infrastructure aid is complementary to FDI inflows and socio-economic infrastructure aid has no significant impact on FDI inflows. When resource (oil) motive of FDI is considered, the results indicate that productive and socio-economic infrastructure aid to oil-producing SSA countries results in less FDI inflows compared to non-oil producing SSA countries. Finally, the significance of sectoral aid analysis is highlighted by the finding of a complementary role of energy infrastructure aid to FDI inflows and an insignificant impact of transport infrastructure aid.
Keywords: Foreign aid; Foreign Direct Investment; Sub-Saharan Africa (search for similar items in EconPapers)
JEL-codes: F F35 (search for similar items in EconPapers)
Pages: 23 pages
New Economics Papers: this item is included in nep-int
References: Add references at CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed
Downloads: (external link)
Working Paper: Foreign Aid and Foreign Direct Investment in Sub-Saharan Africa: A Panel Data Analysis (2016)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:rza:wpaper:612
Access Statistics for this paper
More papers in Working Papers from Economic Research Southern Africa Contact information at EDIRC.
Bibliographic data for series maintained by Dane Rossenrode ().