Revisiting the nexus between domestic investment, foreign direct investment and external debt in SSA countries: PMG‐ARDL approach

Fonchamnyo, Dobdinga Cletus; Dinga, Gildas Dohba; Ngum, Vahsegmi Carolle

doi:10.1111/1467-8268.12593

Cited by 16 publications

(20 citation statements)

References 41 publications

(61 reference statements)

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“…The expected sign associated with CO 2 emission is thus positive. It is opined that FDI has an enhancing effect on development in Africa (Anyanwu & Yameogo, 2015;Asongu & Leke, 2019;Fonchamnyo et al, 2021). A positive sign is expected to be associated with this variable.…”

Section: Control Variablesmentioning

confidence: 98%

Linear and non‐linear effects of infrastructures on inclusive human development in Africa

Nchofoung

Asongu

Kengdo

et al. 2022

African Development Review

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The objectives of this paper are to verify the linear and the non-linear effects of infrastructural development on inclusive human development in Africa. The results of the system GMM estimations show a positive effect of infrastructural development on inclusive development across all the infrastructural development indexes employed, except the ICT infrastructural composite index which presents an insignificant negative effect. Besides, a non-linear effect of infrastructures on inclusive development was established across all the infrastructure indicators except for the ICT indicator. Negative thresholds for complementary policies are established for the African Infrastructure Development Index (AIDI) and the transport index while positive thresholds are apparent for the electricity index and the water and sanitation infrastructure index (WSS). Accordingly, in order to sustain the positive incidence of the AIDI and transport index on human development, complementary policies should be engaged to avoid an overall negative effect on human development when the indexes are respectively, 31.12% and 25.56%. In the same vein, the electricity index and WSSI should exceed critical levels of respectively 49.79% and 41.92%, to engender an overall positive effect on inclusive human development.

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Section: Control Variablesmentioning

confidence: 98%

Linear and non‐linear effects of infrastructures on inclusive human development in Africa

Nchofoung

Asongu

Kengdo

et al. 2022

African Development Review

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“…Similarly, economic policies such as openness to trade aid in the promotion of FDI inflows. Though several studies have assessed the relationship between FDI and external debt, vast of these studies considered these two variables as determining factors for growth (Agyapong and Bedjabeng, 2019;Demikha et al 2021;Fonchamnyo et al 2021;Joshua et al 2021;Tanna et al 2018). Moreover, these studies have been limited to cross-country analysis.…”

Section: Empirical Modelmentioning

confidence: 99%

External Debt and Foreign Investment: An Empirical Analysis on the Economy of Ghana

Prah¹,

Ofori²

2022

EJEF

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This study considers the impact of Ghana’s heavy external debt on its ability to attract foreign investment. The study uses data covering the period from 1991 to 2019. Foreign investment is measured using net foreign direct investment inflows, while external debt is measured using two indicators: public and publicly guaranteed external debt stock and long-term debt stock. Using the ARDL, we found that both external debt indicators have a substantial negative long-run influence on foreign direct investment inflows. On the other hand, economic growth, measured by the gross domestic product, has a substantial positive effect on foreign direct investment inflows. External debt has a detrimental impact on foreign direct investment, while improvement in the country’s economic performance promotes foreign direct investment inflows. The implication is that when funds borrowed are well utilized for economic purposes, it will neutralize the negative consequences of the debt, and the improved economic performance shall augment foreign investment inflows. These findings are essential for most developing economies, especially the African countries, which heavily depend on foreign loans. Policymakers should focus on strategies such as human capital improvement, innovation, and strengthening their legal systems that improve economic performance.

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“…At last, the model is applicable irrespective of the establishment of the order of integration of variables, therefore avoiding pre-testing the unit root bias. The model also addresses issues related to small samples (Fonchamnyo et al, 2021;Olayungbo & Quadri, 2019).…”

Section: Pooled Mean Group-ardl (Pmg-ardl) Estimatorsmentioning

confidence: 99%

Testing Environmental Kuznets Curve Hypothesis for Sub-Saharan African Countries: The Role of Income Inequality and Economic Freedom

Hundie

Bekele

Degu

2022

Preprint

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The rise in atmospheric carbon dioxide (CO2) concentrations has become one of the world’s major environmental concerns nowadays. It has prompted many scholars to investigate the factors that influence CO2 emissions. Many researchers, but overlook the role of economic freedom and income inequality in analyzing the EKC in Sub-Saharan African (SSA) countries. Taking 16 countries based on data availability, this study examines the effect of economic freedom and income disparity on CO2 emissions under the environmental Kuznets curve hypothesis, using balanced quarterly data straddling from 2000 to 2015. To undertake pre-estimation tests, we applied the second-generation panel cross-sectional dependence, slope homogeneity, and unit root tests. By applying cointegration and Granger tests that take heterogeneity into account, the study examined the cointegration status and direction of causality between the variables under scrutiny. PMG/ARDL estimation technique was applied to estimate the long-run coefficients. Results from the PMG/ARDL reveal that economic freedom has no statistically significant effect on CO2 emissions. The result supports the EKC hypothesis. Income inequality, industrialization, and non-renewable energy consumption have statistically significant positive effects on CO2 emissions in the long run. Economic freedom does not affect the environmental quality in the panel of countries studied. The results from the Granger causality analysis indicate that economic freedom, income inequality, renewable energy consumption, non-renewable energy consumption, industrialization, urbanization, and economic growth Granger cause CO2 emissions with a feedback effect except for economic freedom and industrialization. Policies intended to lessen income inequality can enhance environmental quality.

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Revisiting the nexus between domestic investment, foreign direct investment and external debt in SSA countries: PMG‐ARDL approach

Cited by 16 publications

References 41 publications

Linear and non‐linear effects of infrastructures on inclusive human development in Africa

Linear and non‐linear effects of infrastructures on inclusive human development in Africa

External Debt and Foreign Investment: An Empirical Analysis on the Economy of Ghana

Testing Environmental Kuznets Curve Hypothesis for Sub-Saharan African Countries: The Role of Income Inequality and Economic Freedom

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