Foreign direct investment and poverty in sub-Saharan African countries: The role of host absorptive capacity

Arogundade, Sodiq; Biyase, Mduduzi; Eita, Joel Hinaunye

doi:10.1080/23322039.2022.2078459

Cited by 13 publications

(24 citation statements)

References 53 publications

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“…Endogenous growth theory is appropriate in explaining the theoretical linkage between FDI and poverty (Kaulihowa, 2017;Arogundade et al, 2021). The theory maintains that a complete outward shift of the production possibility curve will reduce poverty and enhance welfare.…”

Section: Theoretical Review and Empirical Review 21 Theoreticalmentioning

confidence: 99%

“…The results show that FDI reduces poverty immensely, while the poverty level in the host economies does not deter FDI inflows across the borders. Arogundade et al (2021) conducted a study on FDI and poverty in sub-Saharan Africa (SSA) countries from 1996 to 2018. The results found that FDI alleviates poverty level if human capital is capable of absorbing the new technology brought by foreign firms.…”

Section: Empiricalmentioning

confidence: 99%

“…Based on classical and endogenous growth theories that connect FDI and poverty (Kaulihowa, 2017;Arogundade et al, 2021) argued that FDI will lead to economic growth and reduce poverty. Considering the above theories discussed, the empirical model presented following the work of Akinlo and Dada (2021) and Ucal (2014).…”

Section: Empirical Modelmentioning

confidence: 99%

“…Endogenous growth theory is appropriate in explaining the theoretical linkage between FDI and poverty (Kaulihowa, 2017; Arogundade et al. , 2021).…”

Section: Theoretical Review and Empirical Reviewmentioning

confidence: 99%

“…Arogundade et al. (2021) conducted a study on FDI and poverty in sub-Saharan Africa (SSA) countries from 1996 to 2018.…”

Section: Theoretical Review and Empirical Reviewmentioning

confidence: 99%

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How responsive is the poverty to the foreign direct investment inflows in Nigeria? Evidence from linear and non-linear ARDL

Haruna

Hassan

Ahmad

2022

IJSE

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PurposeThe aim is to examine the long run and short run linear and non-linear impact of foreign direct investment (FDI) inflows on poverty in Nigeria from 1980 to 2019.Design/methodology/approachThe Augmented Dickey Fuller, Phillips Perron and Kwiatkowski-Phillips-Schmidt-Shin unit root tests and bounds test were used to tests the series stationarity and co-integration, respectively. Autoregressive Distributive Lag (ARDL) and non-linear and linear autoregressive Distributive Lag (NARDL) estimators are employed to examine the long run and short run impact of the coefficients of the variables and diagnostic check.FindingsThe study finds that the variables are integrated at a level I(0) and the first difference I(I) and co-integrated. The ARDL estimator indicates that FDI significantly reduces poverty in the long and short run. The findings under NARDL shows FDI positive shock and FDI negative shock reduces poverty substantially in the long-short run, respectively. The error correction term is negative and significant.Research limitations/implicationsThis study is limited to a single country (time series) and less informative compared with the panel data study with much informative and free from hetero-scedasticity. Future studies should consider panel data using a similar or dissimilar approach.Practical implicationsFDI inflows stimulate growth, thereby creating job openings, transfer of modern technology and reduce poverty and demonstrate that, if the finding integrated into policy actions, the government would attract FDI inflows for the real sector of the economy.Social implicationsFDI inflows lead to environmental degradation if inferior technology is use in the host economy, especially the weak environmental regulations in Nigeria.Originality/valueThe authors find no study that applied both ARDL and NARDL estimator, selection of variables measurement and time frame for the study in the context of Nigeria.Peer reviewThe peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-08-2020-0530.

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Section: Theoretical Review and Empirical Review 21 Theoreticalmentioning

confidence: 99%

Section: Empiricalmentioning

confidence: 99%

Section: Empirical Modelmentioning

confidence: 99%

“…Endogenous growth theory is appropriate in explaining the theoretical linkage between FDI and poverty (Kaulihowa, 2017; Arogundade et al. , 2021).…”

Section: Theoretical Review and Empirical Reviewmentioning

confidence: 99%

“…Arogundade et al. (2021) conducted a study on FDI and poverty in sub-Saharan Africa (SSA) countries from 1996 to 2018.…”

Section: Theoretical Review and Empirical Reviewmentioning

confidence: 99%

See 3 more Smart Citations

How responsive is the poverty to the foreign direct investment inflows in Nigeria? Evidence from linear and non-linear ARDL

Haruna

Hassan

Ahmad

2022

IJSE

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Sovereign Credit Ratings: A Friend or Foe to Financial Development of African Countries?

Arogundade,

Mduduzi,

Naanwaab

2024

Int. J Fin Econ

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This study examined the impact of sovereign credit rating on financial development. Using a sample of 21 African countries from 1995 to 2019, the empirical result indicates a significant and positive link between sovereign credit rating and financial development that is, higher credit ratings are associated with lower borrowing costs, increased access to capital, and increased investor confidence. The study further finds that (1) sovereign credit ratings improve the financial institutions and markets of the selected countries; (2) the magnitude of the impact of credit rating on financial development is greater for countries with very high financial development; and (3) there is bidirectional causality between credit rating and financial development. The empirical results are remarkably robust to different measures of sovereign credit rating (Fitch and S&P), local currency debt ratings, sub‐categories of financial development (financial market and institution), and various estimators such as the two‐step system GMM, JKS Granger non‐causality, and the Machado and Silva quantile regression. In order to improve the financial depth and access funding from local and international markets to finance the sustainable development goals and Agenda 2063, the study recommends that African countries implement the necessary policies to obtain better ratings.

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Environmental implications of migration: Worldwide insights

Shen,

Azam,

Jin

et al. 2024

Journal of Environmental Management

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Foreign direct investment and poverty in sub-Saharan African countries: The role of host absorptive capacity

Cited by 13 publications

References 53 publications

How responsive is the poverty to the foreign direct investment inflows in Nigeria? Evidence from linear and non-linear ARDL

How responsive is the poverty to the foreign direct investment inflows in Nigeria? Evidence from linear and non-linear ARDL

Sovereign Credit Ratings: A Friend or Foe to Financial Development of African Countries?

Environmental implications of migration: Worldwide insights

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