Regional economic integration, natural resources and foreign direct investment in SADC

Adika, Gameli

doi:10.1108/jed-02-2021-0021

Cited by 6 publications

(5 citation statements)

References 28 publications

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“…De Gregorio (2003) found that countries with high levels of human capital and extensive natural resource bases, such as Scandinavian countries, can leverage their natural resources for economic growth without negative consequences. Industrialized countries have also been able to protect their natural resources and reduce their reliance on raw materials through technological advancement (Redmond & Nasir, 2020;Haseeb et al, 2021;Adika, 2022). Natural resource abundance tends to increase per capita incomes in countries with less government intervention, more sound money, better property rights protection, less openness to international markets, or less government corruption (Kim & Lin, 2017).…”

Section: Resultsmentioning

confidence: 99%

“…A further increase in the size of the natural resource sector leads to a negative effect of FDI on economic growth. Adika (2022) investigated the complementary roles of economic integration, natural resources, and FDI in explaining economic growth in the Southern African Development Community (SADC) region. The study used OLS and IV estimators to control for potential endogeneity.…”

Section: Introductionmentioning

confidence: 99%

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Foreign Direct Investment (FDI), Abundance of Natural Resources, and Economic Growth

2023

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The impact of foreign direct investment (FDI) on the host country’s economic growth is often discussed without considering the abundance of natural resources in the host country. The present study examines the relationship between FDI and economic growth while considering the presence of natural resources. Using panel data regression with data from 124 countries, the study finds that FDI inflows are increasing significantly, with pronounced differences between countries based on their per capita income levels. The results of the panel data regression analysis show that both FDI and natural resources positively affect economic growth. However, an increase in natural resources reduces the overall impact of FDI on economic growth. This result suggests that countries should attract FDI in sectors outside of natural resources to maximize the positive effects of FDI on economic growth.JEL Classification: F43, O4, P28, P45, Q0How to Cite:Fajrian, M. A., Achsani, N. A., & Widyastutik. (2023). Foreign Direct Investment, Abundance of Natural Resources, and Economic Growth. Signifikan: Jurnal Ilmu Ekonomi, 12(1), 11-26. https://doi.org/10.15408/sjie.v12i1.29975.

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Section: Resultsmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Foreign Direct Investment (FDI), Abundance of Natural Resources, and Economic Growth

2023

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“…They discussed whether the regional trading arrangements conferred any real benefits on the stakeholders, and suggested alternative approaches that may increase the benefits for Uganda from trade liberalization within the customs union. Adika (2021), in his study of regional integration and international trade in SADC, concluded that trade in the region can contribute substantially to provide improved economic growth. Besides, he noted that there was a considerable scope for greater intra-regional trade and growth in international businesses if key policies to enhance regional economic integration were put in place.…”

Section: Has Regional Integration Achieved Its Role In Enhancing Inte...mentioning

confidence: 99%

Admission of Democratic Republic of Congo (Drc) in the East African Community (Eac): Are There Opportunities for Kenya?

Moses

2022

RS Global - IJITSS

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Many countries across the globe are adopting regional economic integration as a strategy towards speeding economic growth and development. Through these integrations, there has been a surge in regional economic blocks, which have served to expand the market for many countries and open others to more robust trading activities and international business. East African Community has also been expanding its membership from three-member states to seven member states. This expansion has been aimed at enhancing the effectiveness of the integration and making the community more comprehensive for the benefit of member countries. The inclusion of Democratic Republic of Congo as the seventh member country was recently concluded, and this has been viewed in varied dimensions. However, there has been a debate on whether the inclusion of DRC will enhance the benefits by the member countries or not. This paper, therefore, sought to establish the opportunities for international business that the EAC member countries are likely to gain out of the inclusion of DRC. The study singled out Kenya, as the largest economy in the community and at the centre of the admission of DRC into the EAC. An empirical approach was adopted where key reports, existing literature and reviews have been reviewed to come up with the findings and discussions. The results have portrayed that the inclusion of DRC into the EAC increases the community’s market by over 89 million consumers while opening the EAC to the Pacific Ocean. Kenyan multinationals have also been steadfast in investing in DRC upon admission of the country into DRC. The results have shown that while regional economic integration may come up with a share of problems from member countries, especially unstable countries, it also opens opportunities for established economies to invest in such economies for continued economic growth and development. It is recommended that both DRC and Kenyan governments lays out more trade facilitation policies and strategies in order to encourage international trade between the two countries and across the EAC region.

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“…Konstantinus et al (2019) urge improving the regional freight transport inflow system to make the SADC more competitive. Adika's (2022) study implies that the SADC needs international cooperation and deeper regional trade integration to become more attractive. Ngeendepi and Phiri (2021) investigated the SADC region's vulnerability by focussing on the crowding-in/out effect of FDI and government expenditure on the SADC members' private domestic investment.…”

Section: Introductionmentioning

confidence: 99%

“…Figure 1 shows that the SADC countries are located in the southern end of Africa, including four Indian Ocean islands. Studies such as Konstantinus et al (2019), Chamisa (2020), Ngeendepi and Phiri (2021), Pretorius et al (2021), andAdika (2022) all emphasise to some extent the SADC region's vulnerability as an investment destination. Some selected indicators are provided in Table 1 below to gain some perspective on the relativity within the SADC region.…”

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confidence: 99%

A Foreign Investment Destination Risk Framework: Evaluating the Southern African Development Community Member States

Oberholzer,

Buys

2023

Folia Oeconomica

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Potential investment risks need to be understood by an investor organisation, which implies that a host country’s environment plays a significant role in attracting foreign investment. This paper’s purpose was to propose a foreign investment risk conceptual framework to serve as a basis for evaluating the Southern African Development Community (SADC) Member States’ investment risk/attractiveness. Firstly, the most appropriate foreign investment risk indicators from the literature were identified to develop a foreign investment risk framework. Ten recent peer reviewed studies were used to identify the factors which drive investment risk in emerging markets. We developed a conceptual framework including 16 investment risk indicators grouped into four sections: (i) the business environment, (ii) related taxes on business operations, (iii) the economic environment, and (iv) the human and social environments. Secondly, a comparative analysis of the 16 SADC countries was performed, enabling the ranking of the countries in quadrants of investment risk/attractiveness. Data were downloaded from theGlobalEconomy.com (2022) website for six years, from 2015 to 2020. The literature suggests many investment risk indicators which are grouped differently by researchers to form a conceptual framework to evaluate investment risk. This study’s contribution is that the most popular/prevalent risk indicators were identified to develop the new proposed framework. Furthermore, evaluating the SADC region may also serve as an example of investment risk/attractiveness assessment of emerging markets or least developed countries. The practical implication of this paper is that the proposed framework enables transferability since potential investors may connect the fundamentals of this study with their own investigation.

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Regional economic integration, natural resources and foreign direct investment in SADC

Cited by 6 publications

References 28 publications

Foreign Direct Investment (FDI), Abundance of Natural Resources, and Economic Growth

Foreign Direct Investment (FDI), Abundance of Natural Resources, and Economic Growth

Admission of Democratic Republic of Congo (Drc) in the East African Community (Eac): Are There Opportunities for Kenya?

A Foreign Investment Destination Risk Framework: Evaluating the Southern African Development Community Member States

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