Foreign Direct Investment, Sectoral Effects and Economic Growth in Africa

Eric Evans Osei Opoku; Muazu Ibrahim; Yakubu Awudu Sare

doi:10.1080/10168737.2019.1613440

Foreign Direct Investment, Sectoral Effects and Economic Growth in Africa

Eric Evans Osei Opoku
, Muazu Ibrahim^*
, Yakubu Awudu Sare

^*Corresponding author for this work

Research output: Journal Publication › Article › peer-review

55 Citations (Scopus)

Abstract

Earlier studies on the impact of Foreign Direct Investment (FDI) on economic growth have not been instructive largely on their failure to examine the sectoral transmission channels through which FDI affects growth. We re-examine the impact of FDI on economic growth in Africa using the system generalized method of moments. The results reveal that, while FDI positively and unconditionally spurs economic growth, its growth-enhancing effect is imaginary when the conditional sectoral effects are introduced. On the channels of manifestation, we notice that the pass-through impact of FDI is only significant for the agricultural and service sectors.

Original language	English
Pages (from-to)	473-492
Number of pages	20
Journal	International Economic Journal
Volume	33
Issue number	3
DOIs	https://doi.org/10.1080/10168737.2019.1613440
Publication status	Published - 3 Jul 2019
Externally published	Yes

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

SDG 8 Decent Work and Economic Growth
SDG 10 Reduced Inequalities
SDG 17 Partnerships for the Goals

Free Keywords

Africa
FDI
economic growth
generalized method of moments
sectoral value additions

ASJC Scopus subject areas

General Economics,Econometrics and Finance

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10.1080/10168737.2019.1613440

Cite this

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title = "Foreign Direct Investment, Sectoral Effects and Economic Growth in Africa",

abstract = "Earlier studies on the impact of Foreign Direct Investment (FDI) on economic growth have not been instructive largely on their failure to examine the sectoral transmission channels through which FDI affects growth. We re-examine the impact of FDI on economic growth in Africa using the system generalized method of moments. The results reveal that, while FDI positively and unconditionally spurs economic growth, its growth-enhancing effect is imaginary when the conditional sectoral effects are introduced. On the channels of manifestation, we notice that the pass-through impact of FDI is only significant for the agricultural and service sectors.",

keywords = "Africa, FDI, economic growth, generalized method of moments, sectoral value additions",

author = "Opoku, \{Eric Evans Osei\} and Muazu Ibrahim and Sare, \{Yakubu Awudu\}",

note = "Publisher Copyright: {\textcopyright} 2019, {\textcopyright} 2019 Korea International Economic Association.",

year = "2019",

month = jul,

day = "3",

doi = "10.1080/10168737.2019.1613440",

language = "English",

volume = "33",

pages = "473--492",

journal = "International Economic Journal",

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T1 - Foreign Direct Investment, Sectoral Effects and Economic Growth in Africa

AU - Opoku, Eric Evans Osei

AU - Ibrahim, Muazu

AU - Sare, Yakubu Awudu

PY - 2019/7/3

Y1 - 2019/7/3

N2 - Earlier studies on the impact of Foreign Direct Investment (FDI) on economic growth have not been instructive largely on their failure to examine the sectoral transmission channels through which FDI affects growth. We re-examine the impact of FDI on economic growth in Africa using the system generalized method of moments. The results reveal that, while FDI positively and unconditionally spurs economic growth, its growth-enhancing effect is imaginary when the conditional sectoral effects are introduced. On the channels of manifestation, we notice that the pass-through impact of FDI is only significant for the agricultural and service sectors.

AB - Earlier studies on the impact of Foreign Direct Investment (FDI) on economic growth have not been instructive largely on their failure to examine the sectoral transmission channels through which FDI affects growth. We re-examine the impact of FDI on economic growth in Africa using the system generalized method of moments. The results reveal that, while FDI positively and unconditionally spurs economic growth, its growth-enhancing effect is imaginary when the conditional sectoral effects are introduced. On the channels of manifestation, we notice that the pass-through impact of FDI is only significant for the agricultural and service sectors.

KW - Africa

KW - FDI

KW - economic growth

KW - generalized method of moments

KW - sectoral value additions

UR - https://www.scopus.com/pages/publications/85065675819

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DO - 10.1080/10168737.2019.1613440

M3 - Article

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SN - 1016-8737

VL - 33

SP - 473

EP - 492

JO - International Economic Journal

JF - International Economic Journal

IS - 3

ER -

Foreign Direct Investment, Sectoral Effects and Economic Growth in Africa

Abstract

UN SDGs

Free Keywords

ASJC Scopus subject areas

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