The Impact of Foreign Direct Investment (FDI) on Economic Growth in Eastern Africa: Evidence from Panel Data Analysis

Zekarias, Seiko Minota

doi:10.11114/aef.v3i1.1317

Cited by 54 publications

(50 citation statements)

References 46 publications

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“…The author reported that aggregate FDI had a very significant impact on economic growth in Zimbabwe, using a multiple regression model. Zekarias (2016) also found a positive correlation between FDI and economic growth concluding that FDI was cardinal for growth of these countries and therefore need to attract more. It is noteworthy that few studies in the literature could not support the above findings.…”

Section: Discussion Of Estimation Resultsmentioning

confidence: 91%

“…The implication was that unless the Zambian government considers reforming policies, FDI will not serve as the prelude for the desired economic growth. Zekarias (2016) analyzed the impact of FDI on Economic growth in 14 Eastern Africa countries by employing 34 years (1980-2013) panel data, using dynamic GMM estimators after checking for autocorrelation and model specification tests. The findings confirm that FDI is a key deriver of economic growth and a catalyst to economic conditional convergence in Eastern Africa; so, the sub-region needs to attract more FDI by improving investment environment, strengthening regional integration, developing human capital and basic infrastructure, and promoting export-oriented investment.…”

Section: Effect Of Fdi and Host Country Economic Growthmentioning

confidence: 99%

“…Bakari 2017, Zekarias (2016) FDI in the mining sector (FDIM) Measured as the amount of FDI flows to the mining sector as a ratio of GDPData on mining sector FDI has been obtained from Zimbabwe Investment Authority (ZIA) Khadaroo and Seetanah (2008), Fauzel et al (2018) FDI in the non-mining sector (FDINM)…”

Section: Unit Root and Cointegration Testsmentioning

confidence: 99%

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The effect of mining foreign direct investment inflow on the economic growth of Zimbabwe

Gochero

Seetanah

2020

Economic Structures

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The study employs the autoregressive distributed lag (ARDL) approach to examine the relationship between foreign direct investment (FDI) in the mining sector on the Zimbabwe economy, while controlling for both non-mining FDI and domestic investment. Using data over the period 1988–2018, this research results show that foreign direct investment in the mining sector has a significant positive relationship with the country’s GDP in the long run. Mining FDI is revealed to have relatively higher effects as compared to FDI in non-mining sector and domestic investment. The short-run analysis observed that mining FDI as well as non-mining and domestic investment still has positive and significant impacts on growth but at a relatively lower extent. This implies that it takes some time for such investments to have their full effect on the economy.

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Section: Discussion Of Estimation Resultsmentioning

confidence: 91%

Section: Effect Of Fdi and Host Country Economic Growthmentioning

confidence: 99%

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The effect of mining foreign direct investment inflow on the economic growth of Zimbabwe

Gochero

Seetanah

2020

Economic Structures

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“…Angola's outflow of investments, primarily by the government-owned petroleum and natural gas MNE Sonangol, expanded by 35 percent to $10.7 billion [11]. Moreover, the outflow of FDI is mostly seen from the Sub-Saharan African countries with less impact from the countries in the northern part of the continent [12]. The table below shows the outflow of FDI from the sub-regions on the African continent.…”

Section: F Outward Foreign Direct Investment In Africamentioning

confidence: 99%

Foreign Direct Investments Inflow and Outflow in the Sub-regions of Africa and Its Trade with the World

Evans¹,

Kesse²,

Isaac³

2018

JOEBM

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This study assessed and provides a holistic Literature review of the flow of investment and the analysis on South Africa and Morocco imports and exports. By examining the impact and projections of Africa's trade contribution to the world's development through the export and import of merchandise trade, it was realized that, Africa trading trends in the United States and the Europeans have changed currently and rather, there has been a diversification in export and import trade destination by the African continent. Africa's trading with the European Union has been switched to the Asian continent with China now the largest trading partner in Africa after the world economic crises in 2008. Secondary data from accredited sources were used for this research and five demographic, social and economic countries from the Northern, Southern, Eastern, Central and Western zones of the Africa continent were used in understudying the aim of this paper/research. The inflow of foreign direct investment into the African continent is mostly from the developed countries, international bodies, the European Union and some of the fastest developing economies on the Asian continent. However, the outflow of FDI is lower as a result of most of the countries in Africa depending heavily on the inflow of foreign direct investment as their main source of development of their economies thereby focusing less on outward investments. The results highlights South Africa, Nigeria, Botswana, Angola and Morocco to continue to be top five (5) home economies of outward FDI in Africa. Therefore, since the continuous increase in investment in Africa as proven to be of favorable conditions and the benefits investors receives from the continent and Investment attraction among other factors were noted, the need of sound investment policies among other factors to entice many investors into the continent are recommended. Index Terms-FDI, business-friendly, foreign investors, trade deficits, Africa and Ecowas.

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“…In empirical studies conducted in different countries or country groups within the scope of the cross section, time series and panel data analysis methodology since 1990s, it is reached the end of the long termed effects of foreign direct investments inflows in capital importer countries on real GDP generally positive and statistically significant. (Balasubramanyam et al, (1996), Borensztein et al, (1998), Bosworth andCollins (1999), De Mello (1999), Obwona (2001), Kumar and Pradhan (2002), Hermes and Lensink (2003), Li and Liu (2004), Khawar (2005), Lensink and Morrisey (2006), Alfaro and Charton (2007), Mun et al, (2008), Chowdhary and Kushwaha (2013), Zekarias (2016)). These results most of which were obtained from studies conducted in developing countries empirically bear the thought of the foreign direct investment inflows have positive effects on economic growth of capital importer countries as is predicted in theoretical framework out.…”

Section: Literature Summary and The Position Of The Research In Litermentioning

confidence: 99%

The Effects of Inward and Outward Foreign Direct Investments on Economic Growth: Evidence from the G-7 and Selected Emerging Market Economies (1994-2015)

Yalçınkaya

Aydın

2017

RAE

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In this study, the long termed effects of foreign direct (capital) investments inflows and outflows on the economic growth of the economies of developed G-7 countries where the capital mobility is intense and selected emerging market economies (Brazil, China, India, Mexico, Russia, South Africa and Turkey (EME-7)) are empirically analyzed for the period of 1994-2015 within the scope of the new generation panel data methodology. From this aspect, it is also aimed to economically analyze whether the foreign direct investments inflows and outflows in countries of G-7 and EME-7 have an effect on the economic growth as is seen in the theoretical framework by being considered the capital exporter/importer positions of these countries. Determined in consequence of the study that foreign direct investments inflows/outflows in the countries of G-7 have a positive and statistically significant effect on economic growth in the long term. Also determined that the foreign direct investments inflows have a positive and statistically significant effect on economic growth in countries of EME-7; while the foreign direct investments outflows have not the same effect on the economic growth. These results which are consonant with the theoretical and empirical literature show that just both foreign direct investments inflows and outflows have a significant role in economic growth on G-7 countries; just foreign direct investments inflows have an important role in economic growth on EME-7 countries at the same time.

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The Impact of Foreign Direct Investment (FDI) on Economic Growth in Eastern Africa: Evidence from Panel Data Analysis

Cited by 54 publications

References 46 publications

The effect of mining foreign direct investment inflow on the economic growth of Zimbabwe

The effect of mining foreign direct investment inflow on the economic growth of Zimbabwe

Foreign Direct Investments Inflow and Outflow in the Sub-regions of Africa and Its Trade with the World

The Effects of Inward and Outward Foreign Direct Investments on Economic Growth: Evidence from the G-7 and Selected Emerging Market Economies (1994-2015)

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