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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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Download file to see previous pages... 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 ...Download file to see next pagesRead More
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