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Effects of Foreign Direct Investment in Sub-Saharan Africa Economic Growth: Evidence from Panel Data Analysis

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  • Christie Dike

    (Department of Finance, College of Business Administration, Prince Sultan University, Riyadh, Kingdom of Saudi Arabia.)

Abstract

Agriculture is the strength of the most Sub-Saharan Africa (SSA) Countries; it promotes significantly to the production of food and raw materials for businesses, and expands opportunities for foreign exchange earnings. Foreign Agricultural Investment is an important source of capital inflow that stimulates economic growth. This paper examines the presence of a long-run positive relationship between Foreign Agricultural Investment and economic growth in the SSA region by using the dynamic panel VECM technique. We justify that there is a positive link between Foreign Agricultural Investment and economic growth in the long run.

Suggested Citation

  • Christie Dike, 2018. "Effects of Foreign Direct Investment in Sub-Saharan Africa Economic Growth: Evidence from Panel Data Analysis," International Journal of Economics and Financial Issues, Econjournals, vol. 8(2), pages 255-261.
    • Handle: RePEc:eco:journ1:2018-02-30
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    References listed on IDEAS

    as
    1. Elizabeth Asiedu, 2006. "Foreign Direct Investment in Africa: The Role of Natural Resources, Market Size, Government Policy, Institutions and Political Instability," The World Economy, Wiley Blackwell, vol. 29(1), pages 63-77, January.
    2. Badi H. Baltagi & Dong Li, 2002. "Series Estimation of Partially Linear Panel Data Models with Fixed Effects," Annals of Economics and Finance, Society for AEF, vol. 3(1), pages 103-116, May.
    3. Borensztein, E. & De Gregorio, J. & Lee, J-W., 1998. "How does foreign direct investment affect economic growth?1," Journal of International Economics, Elsevier, vol. 45(1), pages 115-135, June.
    4. Alfaro, Laura & Chanda, Areendam & Kalemli-Ozcan, Sebnem & Sayek, Selin, 2004. "FDI and economic growth: the role of local financial markets," Journal of International Economics, Elsevier, vol. 64(1), pages 89-112, October.
    5. Stephen Cecchetti & Enisse Kharroubi, 2012. "Reassessing the impact of finance on growth," BIS Working Papers 381, Bank for International Settlements.
    6. Diao, Xinshen & Thurlow, James & Benin, Samuel & Fan, Shenggen, 2012. "Strategies and priorities for African agriculture: Economywide perspectives from country studies," IFPRI books, International Food Policy Research Institute (IFPRI), number Xinshen Diao.
    7. Constantinos Alexiou Persefoni V. Tsaliki, 2007. "Foreign Direct Investment-Led Growth Hypothesis: Evidence from the Greek Economy," Zagreb International Review of Economics and Business, Faculty of Economics and Business, University of Zagreb, vol. 10(1), pages 85-97, May.
    8. Breitung, Jorg, 2002. "Nonparametric tests for unit roots and cointegration," Journal of Econometrics, Elsevier, vol. 108(2), pages 343-363, June.
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    Cited by:

    1. Folasade Bosede Adegboye & Romanus Osabohien & Felicia O. Olokoyo & Oluwatoyin Matthew & Oluwasogo Adediran, 2020. "Institutional quality, foreign direct investment, and economic development in sub-Saharan Africa," Palgrave Communications, Palgrave Macmillan, vol. 7(1), pages 1-9, December.

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    More about this item

    Keywords

    Foreign Direct Investment; Economic Growth; Panel VECM; Sub Saharan Africa (SSA) Countries.;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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