TITLE:
Foreign Direct Investment & Economic Growth in Sub-Saharan Africa: An Empirical Study
AUTHORS:
Bhavish Jugurnath, Nitisha Chuckun, Sheereen Fauzel
KEYWORDS:
Foreign Direct Investment (FDI), Economic Growth, FE & RE Model, GMM Estimates
JOURNAL NAME:
Theoretical Economics Letters,
Vol.6 No.4,
August
24,
2016
ABSTRACT: This study has made an attempt to investigate and analyze empirically the
impact of Foreign Direct Investment (FDI) on
the economic growth for a panel of 32 Sub-Saharan African countries during the period 2008-2014. Both static panel
regression techniques and dynamic panel estimates were employed to assess the causal link of our regressors, namely, FDI, trade openness, domestic
investment, working population size and the effects of the 2009 European debt
crisis on our dependent variable, Gross Domestic Product (GDP) per capita. The
evidence from the statistical analysis suggests that aggregated FDI does have a
positive and significant impact on economic growth and is thus consistent with
the literature, especially with respect to developing countries. Based on
static random effects, the inclusion of the 2009 Euro zone crisis did not
diverge the results despite its negative impact on economic growth. The
contribution of FDI is observed to be relatively higher than domestic
investment.