Trade openness and foreign direct investment in Africa

Kandiero, Tonia; Chitiga, Margaret

doi:10.4102/sajems.v9i3.1093

Cited by 55 publications

(47 citation statements)

References 26 publications

(25 reference statements)

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“…During this time Angola's FDI inflows ranked first in SSA although the country was politically unstable due to civil war. Reference [19] also agrees with [18]. They too found that the political stability variable in their data was insignificant.…”

Section: Literature Reviewsupporting

confidence: 64%

“…Reference [18] finds openness to trade a significant determinant of FDI flows into SSA. Reference [19] also looked into the relationship between trade openness and FDI. These researchers conclude that increased openness in the economy has a positive impact on FDI flows into Africa.…”

Section: Literature Reviewmentioning

confidence: 99%

“…These researchers conclude that increased openness in the economy has a positive impact on FDI flows into Africa. As part of their research [19] mentions that the service sector has more barriers than any of the other sectors. Their results state that further trade liberalization is likely to increase FDI flows into service sectors such as telecommunications, banking, finance, insurance, transport, retail, business, and legal services.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Reference [19] looked into the relationship between real exchange rates and FDI in 38 African countries. They find an inverse relationship between real exchange rate appreciation and FDI inflows.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Research undertaken by [37] finds heavy debt in African countries discourages FDI. Reference [19] find an inverse relationship between real exchange appreciation and inward FDI to African countries. Reference [21] notes that unexpected movements in the exchange rate may affect expected rates of return to investment, which has an impact on FDI flows into Africa.…”

Section: ) Financial Riskmentioning

confidence: 99%

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The Determinants of Foreign Direct Investment in the African Union

Kariuki¹

2015

JOEBM

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Abstract-This paper will examine the factors that influence foreign direct investment (FDI) flows into African countries. FDI flows are important for African nations as they promote economic development. Estimation results using the Least Squares Dummy Variable model also known as the fixed effects model indicate that i) a high economic risk has a negative and significant effect on FDI flows into Africa ii) both political risk and financial risk have a negative but insignificant impact on FDI inflows iii) there is a positive and significant relationship between the commodity price index performance and FDI inflows iv) the good performance of stock markets in developed countries has a positive and significant impact on FDI inflows v) an increase in the infrastructure of a country has a positive and significant effect on FDI inflows vi) an increase in openness to trade has a positive and significant effect on FDI inflows vii) the amount of FDI received in the previous year by African countries is significant in influencing the FDI flows that come into the African continent in the current year. Annual data from 1984 until 2010 using 35 African countries is used for this panel study.Index Terms-Africa, foreign direct investment, long term capital movements, panel data.

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Section: Literature Reviewsupporting

confidence: 64%

Section: Literature Reviewmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

Section: ) Financial Riskmentioning

confidence: 99%

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The Determinants of Foreign Direct Investment in the African Union

Kariuki¹

2015

JOEBM

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Is the causal relation between foreign direct investment, trade, and economic growth complement or substitute? The case of African countries

Akadiri

Güngör

Akadırı³

et al. 2019

Journal of Public Affairs

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This study examines causal nexus between foreign direct investment (FDI) and economic growth for 25 African countries within a model that also takes into consideration trade openness using more recent panel data set over the period 1980–2018. We used panel bootstrapping cointegration techniques that account for cross‐sectional dependence to test whether there is a long‐run cointegration relationship or not. The Granger causality approach is employed to conduct predictive analysis among the panel series. Our findings indicate the presence of a long‐run equilibrium nexus between the variables, and we found a bidirectional causality between foreign direct investment, trade openness, and economic growth. This study provides an insight for governments and policymakers in this region to restructure FDI and trade policies in such a way that its positive spillover would spread across the rural areas and local firms, thereby leading to an all‐inclusive sustainable economic growth and development of African countries in the long run.

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The impact of kidnapping on foreign ownership of firms in Nigeria

Ede

Okafor

2022

Thunderbird Intl Bus Rev

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Nigeria is one of the countries in Sub-Saharan Africa (SSA) that has faced high incidents of kidnapping. As a result of that, some studies have investigated its determinants and economic consequences in Nigeria. However, no study is yet to investigate its impact on the foreign ownership of firms. This is a research void that this article has attempted to fill. Using the World Bank Enterprise Survey and the United Nations Office on Drugs and Crime, we found empirical evidence of the negative impact of kidnapping on the foreign ownership of firms. An increase in the kidnapping rate by one (1 per 100,000 of population) will reduce the foreign ownership of firms by 4.855-10.098% depending on the econometric model. There is also empirical evidence that the impact of kidnapping on foreign ownership will vary by geographical regions in Nigeria and by firm size. Policy implications were deduced from our findings.

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Trade openness and foreign direct investment in Africa

Cited by 55 publications

References 26 publications

The Determinants of Foreign Direct Investment in the African Union

The Determinants of Foreign Direct Investment in the African Union

Is the causal relation between foreign direct investment, trade, and economic growth complement or substitute? The case of African countries

The impact of kidnapping on foreign ownership of firms in Nigeria

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