IDEAS home Printed from https://ideas.repec.org/a/jda/journl/vol.49year2015issue1pp187-206.html
   My bibliography  Save this article

Locational determinants of us outward fdi into sub-saharan Africa

Author

Listed:
  • Godwin Okafor

    (Bournemouth University, UK)

Abstract

This paper uses panel data techniques to investigate the locational determinants of US outward foreign direct investment (FDI) into 23 countries of Sub-Saharan Africa (SSA) for 1996–2010. The findings revealed that US outward FDI into SSA is influenced by the availability of crude oil and natural gas, infrastructure development, market size and completion rates in primary education. Conversely, labor force (of those aged 15+) and inflation deter US FDI, while political instability, corruption, and the exchange rate have an insignificant negative relationship with US FDI. These findings suggest that US investors investing in SSA are significantly influenced by resource and market seeking factors but not by efficiency seeking factors. The study therefore suggests that credible policies for attracting US investors into SSA countries should be relentlessly pursued through education, training and skills acquisition, inflation targets, trade openness (especially in the natural resource sector), corruption control and political stability.

Suggested Citation

  • Godwin Okafor, 2015. "Locational determinants of us outward fdi into sub-saharan Africa," Journal of Developing Areas, Tennessee State University, College of Business, vol. 49(1), pages 187-206, January-M.
    • Handle: RePEc:jda:journl:vol.49:year:2015:issue1:pp:187-206
    as

    Download full text from publisher

    File URL: http://muse.jhu.edu/journals/journal_of_developing_areas/v049/49.1.okafor.html
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Abderrazek Ben Hamouda, 2023. "On the Link Between FDI, Political Risk and Economic Growth in Sub-Saharan Africa: A Panel VAR Approach," Journal of Economic Impact, Science Impact Publishers, vol. 5(2), pages 171-180.
    2. Oro, Oro Ufuo & Alagidede, Imoptep Paul, 2021. "Does petroleum resources or market size drive foreign direct investment in Africa? New evidence from time-series analysis," Resources Policy, Elsevier, vol. 71(C).
    3. George Owusu-Antwi & Dwobeng Owusu Nyamekye & Patrick Ofei & Frederick A. Aikens, 2019. "Foreign Direct Investment: Is Natural Resources the Rejoin? Evidence from Ghana, Nigeria, and Togo: Fixed Effect Approach," International Journal of Asian Social Science, Asian Economic and Social Society, vol. 9(12), pages 588-606, December.
    4. Seth Nana Kwame Appiah-Kubi & Karel Malec & Sandra Boatemaa Kutin & Mansoor Maitah & Michael Chanda Chiseni & Joseph Phiri & Zdeňka Gebeltová & Sylvie Kobzev Kotásková & Kamil Maitah, 2020. "Foreign Ownership in Sub-Saharan Africa: Do Governance Structures Matter?," Sustainability, MDPI, vol. 12(18), pages 1-15, September.
    5. Avom Désiré & Melingui bate Adalbert Abraham Ghislain, 2020. "The effect of information and communication technologies on foreign direct investments attractiveness in Africa," Economics Bulletin, AccessEcon, vol. 40(3), pages 2304-2319.
    6. Lu, Qiongfang & Wilson, Craig, 2024. "Infrastructure financing in Africa," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 91(C).
    7. Vibha Kapuria-Foreman, 2022. "Foreign direct investment and natural resources," Economics Bulletin, AccessEcon, vol. 42(4), pages 2200-2213.
    8. Kimiagari, Salman & Mahbobi, Mohammad & Toolsee, Tushika, 2023. "Attracting and retaining FDI: Africa gas and oil sector," Resources Policy, Elsevier, vol. 80(C).
    9. Ling Liu & Jose Godinez & John Henley & J. Mauricio Galli Geleilate, 2023. "Corruption distance and the equity-based foreign entry strategies of multinational enterprises in sub-Saharan Africa," Journal of International Business Policy, Palgrave Macmillan, vol. 6(4), pages 492-510, December.
    10. Bruno Emmanuel Ongo Nkoa & Jacques Simon Song, 2017. "Analyse des effets de la qualité des institutions sur la volatilité des Investissements Directs Etrangers en Afrique," African Development Review, African Development Bank, vol. 29(4), pages 674-688, December.
    11. Ethel Ansaah Addae & Dongying Sun & Olivier Joseph Abban, 2023. "Evaluating the effect of urbanization and foreign direct investment on water use efficiency in West Africa: application of the dynamic slacks-based model and the common correlated effects mean group e," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(7), pages 5867-5897, July.

    More about this item

    Keywords

    FDI; US FDI; Sub-Saharan Africa (SSA); Resource Seeking; Market Seeking; Efficiency Seeking;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F68 - International Economics - - Economic Impacts of Globalization - - - Policy
    • O51 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - U.S.; Canada
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:jda:journl:vol.49:year:2015:issue1:pp:187-206. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Abu N.M. Wahid (email available below). General contact details of provider: https://edirc.repec.org/data/cbtnsus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.