Are the determinants of FDI in Sub-Saharan Africa and Mauritius from Chinese companies different than for companies from the rest of the world?
Title of Study
Nature of Study
Nature of Sample
Determinants Used in Sample
The location of foreign direct investment: an empirical analysis
Cross-Sectional Study using Regression model
8 determinants - GDP, Growth rate, Export, Political Risk, Educational Level, Energy, Telephone lines, Capital stocks
Countries better suited to attract FDI are developed countries with high GDP, growth rate, export, capital stock and educational level, good infrastructure level and low risk. Therefore, SSA needs to improve these to attract FDI.
On the Determinants of Foreign Direct Investment to Developing Countries: is Africa Different?
Ordinary Least Square
31 SSA Countries and 39 Non-SSA Countries
Return on Investment, Infrastructure Development, Openness, Political Risk, Economic Variables
FDI determinants in these 2 set of countries are different. For instance, infrastructure and increase capital return it important for SSA countries. Openness is important for both and the most important finding is that FDI hugely depends on the location of the country.
Determinants of Trade Policy Reform in Sub-Saharan Africa
37 African Countries
Macroeconomic Variables, Crisis Indicators, Structural, Political and Institutional Variables
Results were that more international aid, development of the country, well-built current account and big manufacturing sector inc0reases FDI. The study also proved that economic crisis also promotes FDI inflows. High taxes, foreign competition and big government do not favour FDI. The significant determinants are market size, government size, taxes, foreign aid and current account balances.
The Determinants of Foreign direct Investment in a Comparative Perspective: Is there a Bias against Sub-Saharan Africa?
Real GDP and GDP per capita, Growth Rate, Government Size, Investment Ratio, Real Exchange Rate, Debt Service Ratio and Political Instability
Africa is responsible for small inflow of FDI during that period and there exist a huge difference in the determinants FDI inflow between the rest of the world and SSA.
Onyeiwu and Shrestha (2004)
Determinants of Foreign Direct Investment in Africa
Fixed and random effects model
29 African countries
Economic and reforms
Their study showed that the determinants of FDI to Africa were inflation, openness, economic growth, international reserves and natural resources.
The Growing Relationship Between China and Sub-Saharan Africa: Macroeconomic, Trade, Investment and Aid Links
All SSA countries
China is increasing the trade indices between countries with plenty of resources and resource-poor countries. Important variables are export level in natural resources and textile.
Sawkut et al. (2007)
Determinants of FDI: Lessons from African Economies
Hausman specification test
20 African countries
Natural Resource Intensity, Market Size, Labour Cost, Human Capital, Corporate Tax Rates, Openness and Political Instability
Most determinants showed a positive result as confirmed by previous literatures. Only political instability and labour cost produced negative results.
How effective are fiscal incentives to attract FDI to Sub-Saharan Africa?
Multiple Regression Analysis
16 SSA Countries
GDP per capita, GDP growth, Political Stability, Tax Incentives and Concessions, Repatriation of Profits, Human Capital, Infrastructure, Exchange Rate and Corruption Perception Index
Conventional factors affecting FDI are important determinants of FDI such as labour cost and skills, infrastructure, growth. The study showed that policies implemented by the government are important.