Analysis of government policies, institutions, and inward foreign direct investment: evidence from sub-Saharan Africa

Ochuko B. Emudainohwo; Agyenim Boateng; Sanjukta Brahma; Franklin Ngwu

doi:10.1002/tie.21942

Analysis of government policies, institutions, and inward foreign direct investment: evidence from sub-Saharan Africa

Ochuko B. Emudainohwo, Agyenim Boateng, Sanjukta Brahma, Franklin Ngwu

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Abstract

This article examines the effects of government policies and institutions on foreign direct investment (FDI) inflows in sub-Saharan African context using both quantitative and qualitative approaches. On the quantitative approach, we analyzed the effects of institutions on FDI using two statistical techniques—canonical cointegration regression (CCR) and fully modified ordinary least square (FMOLS)—over the period of 1984–2012. We find that political instability, democratic accountability, and investment risk have significant impact on inward FDI in Nigeria. Using a trend analysis, our results provide evidence to suggest that liberal government investment policies have positive influence on FDI inflows. Our qualitative analysis over the 1962–2012 period supports the results of the quantitative analysis.

Original language	English
Pages (from-to)	523-534
Number of pages	12
Journal	Thunderbird International Business Review
Volume	60
Issue number	4
Early online date	11 Sep 2017
DOIs	https://doi.org/10.1002/tie.21942
Publication status	Published - Aug 2018

Keywords

government policies
Africa
foreign direct investment

Documents and Links

10.1002/tie.21942

Emudainohwo, O.B. et al (2017) Thunderbird International Business Review article
This is the peer reviewed version of the following article: [Emudainohwo OB, Boateng A, Brahma S, Ngwu F. Analysis of government policies, institutions, and inward foreign direct investment: Evidence from sub-Saharan Africa. Thunderbird Int. Bus. Rev. 2017;1–12] which has been published in final form at https://doi.org/10.1002/tie.21942 This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Self-Archiving.
Accepted author manuscript, 810 KB

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title = "Analysis of government policies, institutions, and inward foreign direct investment: evidence from sub-Saharan Africa",

abstract = "This article examines the effects of government policies and institutions on foreign direct investment (FDI) inflows in sub-Saharan African context using both quantitative and qualitative approaches. On the quantitative approach, we analyzed the effects of institutions on FDI using two statistical techniques—canonical cointegration regression (CCR) and fully modified ordinary least square (FMOLS)—over the period of 1984–2012. We find that political instability, democratic accountability, and investment risk have significant impact on inward FDI in Nigeria. Using a trend analysis, our results provide evidence to suggest that liberal government investment policies have positive influence on FDI inflows. Our qualitative analysis over the 1962–2012 period supports the results of the quantitative analysis.",

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