Capital flight and foreign direct investment in Africa: An investigation of the role of natural resource endowment

Léonce Ndikumana and Mare Sarr

No wp-2016-58, WIDER Working Paper Series from World Institute for Development Economic Research (UNU-WIDER)

Abstract: This paper aims to provide theoretical and empirical insights into the puzzling simultaneous rise in foreign direct investment (FDI) inflows in Africa and capital flight from the continent over the past decades. It specifically explores two questions: Is FDI a potential driver of capital flight? And, is natural resource endowment a possible channel for the capital flight-FDI link? The econometric analysis is based on 32 African countries over the period 1970-2013 using dynamic panel data estimation methods. Three important findings emerge from the analysis.

Keywords: Capital; Foreign investments; Natural resources (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (18)

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