Effects of Foreign Direct Investment on Total Factor Productivity in CEMAC

Abstract

his article aims to analyze the effects of foreign direct investment (IDE) on total factor productivity (PTF) in the Economic and Monetary Community of Central Africa (CEMAC). Using annual data for the period 1990-2020, the methodology was based on the Generalized Moments Method (MMG). The results of this research indicate that three variables positively influence total factor production. These are total factor productivity lagged one period, foreign direct investment and human capital. On the other hand, trade openness, labor force, gross fixed capital formation and political stability negatively explain total factor production. This suggests a series of policy recommendations.