FDI AND ECONOMIC TRANSFORMATION IN AFRICA: Quantifying Multinational Companies’ spillovers in the SSA region

Mufudza, Voronica FDI AND ECONOMIC TRANSFORMATION IN AFRICA: Quantifying Multinational Companies’ spillovers in the SSA region. (Unpublished)

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Abstract

Foreign direct investment (FDI) is widely considered an essential element for achieving sustainable growth. This has resulted in a pervasive stampede, by both the developed-to- developing countries as well as countries whose economies are in transition, to attract more FDI envisaged to backstop their development strategies. Alongside this is the most celebrated growth trajectory in Africa, whereby in the International Monetary Fund (October, 2014) language ‘the world is in a mess, but not Africa’. This paper seeks to establish how much of the FDI activities in Sub-Saharan Africa (SSA) has been translated into economic benefit for the host countries. It extends the analysis of aggregate FDI- growth relationships to intra and inter-sector spill-over effects, thereby reconciling the often inconclusive evidence on the growth impact of FDI in SSA. An interrogation of the figures in an econometric estimation of the FDI-growth relationship reveals that while FDI may seem like the flavor of the century when measured by the rate it has been growing in Africa, this international interest in the region is yet to be translated into generation of livelihood and growth opportunities for recipient countries.

Item Type: Article
Subjects: H Social Sciences > HB Economic Theory
Divisions: Universities > State Universities > Midlands State University
Depositing User: Ms Voronica Mufudza
Date Deposited: 24 Feb 2015 09:28
Last Modified: 29 Dec 2015 12:25
URI: http://researchdatabase.ac.zw/id/eprint/532

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