Impact of Foreign Aid and Foreign Direct Investment on Economic Growth: Evidence from Sub-Saharan African Countries

Mohamed, Masoud Rashid; Kaliappan, Shivee Ranjanee; Ismail, Normaz Wana; Ngah, Wan Azman Saini Wan

doi:10.17576/jem-2014-4801-06

Cited by 4 publications

(2 citation statements)

References 39 publications

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“…Studies on the impacts and contribution of these three variables to economic growth have been done by Paudel and Perera (2009), Aljebrin (2012), Ullah et al (2014), Nordin et al (2014), and ILO, OECD and the World Bank Group (2015). However, several empirical studies indicate that FDI and external debt have minimum contribution to the domestic economy (Duasa 2007;Wehinger 2011;Aurangzeb & Haq 2012;Mohamed et al 2014).…”

Section: Introductionmentioning

confidence: 99%

The Impact of Foreign Direct Investment, Labour Force, and External Debt on Economic Growth in Indonesia and Malaysia

Cahyadin

Sarmidi²

2019

JEM

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The study aims to estimate the impact of Foreign Direct Investment (FDI), labour, and external debt on economic growth in Indonesia and Malaysia over the period 1980-2016. The findings are expected to serve as a reference for macroeconomic policies in Indonesia and Malaysia. Employing an Autoregressive Distributed Lag Model (ARDL) and Error Correction Model (ECM), we find that FDI, labour force and external debt have a significant impact on the economic growth in the long-and short-run in both countries. Statistically, the estimated models are stable. Therefore, it is recommended that the authorities in Indonesia and Malaysia should concentrate on attracting more quality FDI inflows and properly manage external debts as well as high-skilled labour force, which are vital to economic growth.

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Section: Introductionmentioning

confidence: 99%

The Impact of Foreign Direct Investment, Labour Force, and External Debt on Economic Growth in Indonesia and Malaysia

Cahyadin

Sarmidi²

2019

JEM

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“…However, none of the variables that measure capital in ows shows any level of signi cance to economic growth. A possible explanation for the insigni cant result of foreign direct investment in ows, according to Mohamed et al (2014), is that the ow of capital to Africa is very low. Duodu and Baidoo (2020) say that foreign direct investment doesn't have much of an effect on economic growth because foreign investors send their pro ts back to their home countries.…”

Section: Estimation Of Fgls and Amg Resultsmentioning

confidence: 99%

Capital Inflows, Institutional Quality and Economic Growth: Empirical Evidence From Oil Exporting African Countries.

Nkire

Akomolafe

Aiyegbusi

2023

Preprint

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The study investigates the effect of capital inflows and institutional quality on economic growth in eight oil exporting African countries using FGLS and AMG methods to analyse the data spanning from 1996 to 2020. It was observed that foreign direct investment, external debt and official development assistance present no significant influence on economic growth. Institutional quality has a positive and significant influence on economic growth. When institutional quality was interacted with the various capital inflows, it only had influence on external debt as the interaction between institutional quality and external debt revealed a significant effect but did not spur economic growth. The study therefore concluded that capital inflows have no effect on economic growth. Consequently, the study recommends that, for oil exporting African countries to reduce the risks and uncertainties inherent with foreign direct investment, good institutions must be set up and made to work, long-term economic growth and fiscal and debt sustainability must be emphasized, and finally, aid should be provided based on achieved policy levels rather than promises of improvement in order to boost foreign aid effectiveness.

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Relative Effectiveness of Bilateral and Multilateral Aid on Development Outcomes

Biscaye

Reynolds

Anderson

2016

Review Development Economics

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Aid donors are interested in understanding whether allocating aid via bilateral or multilateral channels might be more effective for achieving development goals. We review 45 papers that empirically test the associations between bilateral and multilateral aid flows and various development outcomes including gross domestic product growth, governance indicators, human development indicators and levels of nonaid investment flows. Findings suggest that differences between countries and regions, time periods, aid objectives, and individual donor organizations all may influence the effectiveness of aid delivered bilaterally and multilaterally. We find, however, no consistent evidence that either bilateral or multilateral aid is more effective overall.

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Impact of Foreign Aid and Foreign Direct Investment on Economic Growth: Evidence from Sub-Saharan African Countries

Abstract: The purpose of this study is to examine the impact of foreign aid and FDI

Cited by 4 publications

References 39 publications

The Impact of Foreign Direct Investment, Labour Force, and External Debt on Economic Growth in Indonesia and Malaysia

The Impact of Foreign Direct Investment, Labour Force, and External Debt on Economic Growth in Indonesia and Malaysia

Capital Inflows, Institutional Quality and Economic Growth: Empirical Evidence From Oil Exporting African Countries.

Relative Effectiveness of Bilateral and Multilateral Aid on Development Outcomes

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