Foreign direct investment and economic growth of Africa

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Authors: Basu Sharma and Joe Abekah
Date: Mar. 2008
From: Atlantic Economic Journal(Vol. 36, Issue 1)
Publisher: Springer
Document Type: Report
Length: 584 words
Lexile Measure: 1330L

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JELs F21 * O47

There is voluminous empirical research dealing with the relationship between foreign direct investment (FDI) and the growth of gross domestic product (GDP) in developing countries. The theoretical underpinnings of this literature are such that an inflow of foreign capital constitutes a net addition to resources available for investment, while an inflow of foreign resources induces public and private sectors to save less and to consume more domestic resources. Thus, the former will predict a growth augmenting effect and the latter a growth retarding effect. However, the empirical literature is short on the role of FDI in the economic growth of African countries. Given the fact that the concern for rapid economic growth is one of the key policy issues in the region, this neglect is unfortunate and needs to be redressed. Against this backdrop, our objective was to examine the effects of...

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Gale Document Number: GALE|A180797031