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 languageEnglish
    Pages (from-to)523-534
    Number of pages12
    JournalThunderbird International Business Review
    Volume60
    Issue number4
    Early online date11 Sep 2017
    DOIs
    Publication statusPublished - Aug 2018

    Keywords

    • government policies
    • Africa
    • foreign direct investment

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