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THE IMPACT OF FDI IN SUB-SAHARAN AFRICA(SOUTH AFRICA, EGYPT, MORROCO AND TUNISIA) - Literature review Example

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FDI has had a significant impact on Sub-Saharan African countries for many years because of participation of both investors and the host state governance and economy. A study by Campos and Kinoshita (2006:36) shows us the significance of institutions and accumulation with…
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THE IMPACT OF FDI IN SUB-SAHARAN AFRICA(SOUTH AFRICA, EGYPT, MORROCO AND TUNISIA)
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THE IMPACT OF FDI IN SUB-SAHARAN AFRICA (SOUTH AFRICA, EGYPT, MORROCO AND TUNISIA) LITERATURE REVIEW How doing it- 1st research articles of 4 countries and critically evaluate methodologies used, STATISTICAL ANALYSIS, RESEARCH METHODOLOGY. 550
FDI has had a significant impact on Sub-Saharan African countries for many years because of participation of both investors and the host state governance and economy. A study by Campos and Kinoshita (2006:36) shows us the significance of institutions and accumulation with reference to the original status and other factors that determine how investors choose their location their article; Why Does FDI Go Where it Goes?: New Evidence from the Transition Economies. In their study, they use a unique set of 25 country economies between 1990 and 1998 that covers countries at both the developing and developed stages of transition. This aimed at providing a fuller and well rounded identification of issues that impact on the success and failure of most countries in transition such as South Africa in attracting FDI (Campos and Kinoshita, 2006:36). According to Campos and Kinoshita (2006), institutions, labour expenses, agglomeration, economies, and availability of natural resources are the main causes of FDI inflows to these countries.
Another study by John C. Anyanwu (2012), who wrote the article Why Does Foreign Direct Investment Go Where It Goes?: New Evidence from African Countries, seeks to understand how the factors affecting the development of FDI will help the policymakers of Sub-Saharan African Countries in the formulation and execution of policies for attracting FDI. In this study, they used cross-country regressions for the period 1996-2008. Because they used cross-sectional data, they had to carry out four different empirical techniques to add more weight to their empirical results (Anyanwu, 2012:451). These techniques include robust pooled ordinary least squares (OLS), the feasible generalized least squares (FGLS), both OLS and FGLS methods to check historical data, and finally, the two-step (IV) efficient, generalized method of moments (GMM). These techniques ensured that the results are relevant to the African continent, its sub-regions and individual countries (Anyanwu, 2012:452).
There is another study done by Ajayi (2006) titled The Determinants of Foreign Direct Investment in Africa: A Survey of the Evidence. In this study, they used case studies of countries under consideration as a way of collecting information about FDI. Their main area of focus in these case studies was identifying the common point that unites various factors that attract FDI to a country. They also sought to find out specific factors about some countries and see whether they could be successfully and beneficially applied to others (Ajayi, 2006:14). From these studies, we get to understand the magnitudes and make up of FDI, trends, factors affecting the flows of FDI to the country, current state of the country with regards to FDI, and the policies enacted to attract FDI (Ajayi, 2006:15).
The fourth article I will look at in this paper is an article by Sarumi Adewumi titled; The Impact of FDI on Growth in Developing Countries: An African Experience. The article looks at how FDI has contributed to African economic growth by using the techniques of graphical and regression analysis. With the help of data in the time set of 1970 to 2003, they used empirical analysis to examine information from Sub-Saharan African countries. From this study, they came up with the inference that there is a positive but insignificant contribution of FDI to economic growth. (Adewumi, 2006: 8).
References
Adams, S. 2009. Can foreign direct investment (FDI) help to promote growth in Africa?. African Journal of Business Management.3 (5): 178-183.
Adewumi, S. 2006. The Impact of FDI on Growth in Developing Countries: An African Experience. Jönköping International Business School, Jönköping University. 1-16
Ajayi, S.I. 2006. The Determinants of Foreign Direct Investment in Africa: A Survey of the Evidence. African Economic Research Consortium. 11-32.
Anyanwu, J.C. 2012. Why Does Foreign Direct Investment go where it goes?: New Evidence from African Countries. Annals of Economics and Finance. 13(2): 433-470.
Campos, F.N., and Kinoshita, Y. 2006. Why Does FDI Go Where it Goes?: New Evidence from the Transition Economies. African Economic Research Consortium. 33-54.
Communications of the IBIMA. 2008. Nigeria’s Economic Growth: Emphasizing the Role of Foreign Direct Investment in Transfer of Technology. Communications of the IBIMA. 3 (1):76-78.
Fortanie, F. 2007. Foreign direct investment and host country economic growth: Does the investor’s country of origin play a role? Transnational Corporations.16 (2), p42-60.
Herman, M., Chishol, D., &Leavell, H. (2004).FDI and the effects on society. Proceedings of the Academy for Studies in Intenational Business. 4(1):15-17.
Hurmes, N &Lensink, R. 2003.Foreign direct investment, financial development and economic growth. Journal of Development Studies. 40 (1):142-163.
Moosa, I. A. 2002. Foreign Direct Investment: Theory, Evidence and Practice. New York: Palgrave. Read More
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