IDEAS home Printed from https://ideas.repec.org/a/kap/ecopln/v57y2024i6d10.1007_s10644-024-09820-9.html
   My bibliography  Save this article

Does the presence of democratic traits enhance Africa’s appeal for foreign direct investment?

Author

Listed:
  • Kazeem Bello Ajide

    (University of Lagos)

Abstract

This study examines the relationship between democracy and foreign direct investment (FDI) in 40 African nations using a two-step generalized method of moments (GMM) analysis. It explores five varieties of democracy and fifteen democratic traits. The findings reveal that egalitarian and deliberative democracies significantly attract FDI, with deliberative democracy having a particularly strong effect. Unlike egalitarian and deliberative democracies, participative democracy has a reducing impact on FDI. Similarly, nine democratic traits were found to significantly attract FDI. Economic factors like per capita GDP and natural resource rents showed mixed effects on FDI inflows, suggesting that the quality of democratic governance is crucial. Policy implications include strengthening democratic institutions, improving legal frameworks, ensuring fair elections, and enhancing government accountability to create a favorable investment climate. Policymakers are encouraged to focus on these areas to boost FDI and promote economic growth and development across the continent.

Suggested Citation

  • Kazeem Bello Ajide, 2024. "Does the presence of democratic traits enhance Africa’s appeal for foreign direct investment?," Economic Change and Restructuring, Springer, vol. 57(6), pages 1-43, December.
    • Handle: RePEc:kap:ecopln:v:57:y:2024:i:6:d:10.1007_s10644-024-09820-9
    DOI: 10.1007/s10644-024-09820-9
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10644-024-09820-9
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s10644-024-09820-9?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Keywords

    Democracy; Foreign direct investment; Panel data analysis; Two-step GMM; Africa;
    All these keywords.

    JEL classification:

    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • P12 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Enterprises

    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:kap:ecopln:v:57:y:2024:i:6:d:10.1007_s10644-024-09820-9. 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: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    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.