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Foreign Direct Investment, Political Business Cycles and Welfare in Africa

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  • Elikplimi Komla Agbloyor

Abstract

We examine the relation between foreign direct investment (FDI), elections and welfare in Africa using data from 1990 to 2014. Our results show evidence that elections play a positive role in altering the relationship between FDI and welfare as they are considered by investors as risk reduction events. Interestingly, when we split the sample based on the quality of institutions, we find that the interaction between FDI and elections is mostly insignificant in countries with strong institutions. However, the interaction between FDI and elections is positive and significant in countries with weak institutions. © 2019 John Wiley & Sons, Ltd.

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  • Elikplimi Komla Agbloyor, 2019. "Foreign Direct Investment, Political Business Cycles and Welfare in Africa," Journal of International Development, John Wiley & Sons, Ltd., vol. 31(5), pages 345-373, July.
    • Handle: RePEc:wly:jintdv:v:31:y:2019:i:5:p:345-373
    DOI: 10.1002/jid.3408
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    Cited by:

    1. Ofori-Sasu, Daniel & Agbloyor, Elikplimi Komla & Nsafoah, Dennis & Asongu, Simplice A., 2024. "Banking behaviour and political business cycle in Africa: The role of independent regulatory policies of the central bank," The Journal of Economic Asymmetries, Elsevier, vol. 29(C).
    2. Bayale, Nimonka & Tchagnao, Abdou-Fataou & Chavula, Hopestone Kayiska, 2020. "More elections, more burden? On the relationship between elections and public debt in Africa," MPRA Paper 101744, University Library of Munich, Germany.
    3. Ferreira, João J. & Gomes, Sofia & Lopes, João M. & Zhang, Justin Z., 2023. "Ticking time bombs: The MENA and SSA regions' geopolitical risks," Resources Policy, Elsevier, vol. 85(PA).
    4. Olufemi Adewale Aluko & George S. Chen & Eric Evans Osei Opoku, 2023. "Is foreign direct investment globalization‐induced or a myth? A tale of Africa," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 28(3), pages 2651-2663, July.
    5. Mark Edem Kunawotor & Godfred Alufar Bokpin & Charles Barnor, 2020. "Drivers of income inequality in Africa: Does institutional quality matter?," African Development Review, African Development Bank, vol. 32(4), pages 718-729, December.
    6. Ronald Ebenezer Essel, 2023. "Foreign direct investment, technological spillover, and total factor productivity growth in Ghana," SN Business & Economics, Springer, vol. 3(8), pages 1-34, August.
    7. Marvin Jahn & Paul Stricker, 2022. "FDI, liquidity, and political uncertainty: A global analysis," International Economics and Economic Policy, Springer, vol. 19(4), pages 783-823, October.
    8. Mark Edem Kunawotor & Godfred Alufar Bokpin & Patrick O. Asuming & Kofi A. Amoateng, 2022. "The implications of climate change and extreme weather events for fiscal balance and fiscal policy in Africa," Journal of Social and Economic Development, Springer;Institute for Social and Economic Change, vol. 24(2), pages 470-492, December.
    9. Isaac Ofoeda & Elikplimi Komla Agbloyor & Joshua Yindenaba Abor & Kofi Osei Achampong, 2022. "Foreign direct investment, anti‐money laundering regulations and economic growth," Journal of International Development, John Wiley & Sons, Ltd., vol. 34(3), pages 670-692, April.

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