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Saudi Journal of Economics and Finance (SJEF)
Volume-3 | Issue-02 | 89-95
Original Research Article
Foreign Direct Investment (FDI) Inflows in Africa: Evidence from the “Big Three”
Aderemi Timothy Ayomitunde, Amusa Bolanle Olubunmi, Elufisan Omowumi Olaronke, Alawode Abimbola Morenikeji
Published : Feb. 28, 2019
DOI : 10.21276/sjef.2019.3.2.3
Abstract
The controversy surrounding the major determinants of FDI inflows in Africa motivated this study. Past empirical studies have failed to examine how the growth rate of the economy could affect FDI inflows in the continent. The study employed a panel OLS to pool annual data from three largest economies in Africa between 1990 and 2017. This paper identified that, there exists active and passive determinants of FDI inflows in Africa. However, the study reveals that the active determinants of FDI inflows in Africa are market size and the growth rate of economy while the passive determinants are GDP per capita and past FDI inflows. Therefore, the study recommends that the policy makers in Africa need to embark on economic reforms and policies that will promote the expansion of the market size that will guarantee sustainable economic growth in the continent, this in turn will serve as a catalyst that will stimulate further attraction of FDI inflows into Africa.
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