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Global uncertainty, economic governance institutions and foreign direct investment inflow in Africa

Based on the fact that Africa has not fared well in attracting foreign direct investments in the last decade compared to other regions of the world, especially during periods of high uncertainty occasioned by one crisis or the other, this study investigated: the impacts of global uncertainty and eco...

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Autores principales: Ogbonna, Oliver E., Ogbuabor, Jonathan E., Manasseh, Charles O., Ekeocha, Davidmac O.
Formato: Online Artículo Texto
Lenguaje:English
Publicado: Springer US 2022
Materias:
Acceso en línea:https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8799434/
http://dx.doi.org/10.1007/s10644-021-09378-w
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author Ogbonna, Oliver E.
Ogbuabor, Jonathan E.
Manasseh, Charles O.
Ekeocha, Davidmac O.
author_facet Ogbonna, Oliver E.
Ogbuabor, Jonathan E.
Manasseh, Charles O.
Ekeocha, Davidmac O.
author_sort Ogbonna, Oliver E.
collection PubMed
description Based on the fact that Africa has not fared well in attracting foreign direct investments in the last decade compared to other regions of the world, especially during periods of high uncertainty occasioned by one crisis or the other, this study investigated: the impacts of global uncertainty and economic governance institutions on FDI inflow to Africa; the moderating effect of economic governance institutions on global uncertainty-FDI relationship in Africa; and other significant drivers of FDI inflow to Africa. The study used the system GMM modeling framework and a panel of 46 African economies over the period 2010–2019. The results indicate that global uncertainty has a significant dampening effect on FDI inflow to Africa, and economic governance institutions on the continent amplify this effect rather than mitigate it. The results further indicate that natural resource endowment, market size, and initial FDI inflows are robust drivers of FDI inflows to Africa, while the roles of financial development and trade openness remained muted. Overall, the study concludes that policymakers in Africa should take urgent steps to strengthen the quality of economic governance institutions as a means of mitigating the excruciating effect of global uncertainty on FDI inflows to Africa.
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spelling pubmed-87994342022-01-31 Global uncertainty, economic governance institutions and foreign direct investment inflow in Africa Ogbonna, Oliver E. Ogbuabor, Jonathan E. Manasseh, Charles O. Ekeocha, Davidmac O. Econ Change Restruct Article Based on the fact that Africa has not fared well in attracting foreign direct investments in the last decade compared to other regions of the world, especially during periods of high uncertainty occasioned by one crisis or the other, this study investigated: the impacts of global uncertainty and economic governance institutions on FDI inflow to Africa; the moderating effect of economic governance institutions on global uncertainty-FDI relationship in Africa; and other significant drivers of FDI inflow to Africa. The study used the system GMM modeling framework and a panel of 46 African economies over the period 2010–2019. The results indicate that global uncertainty has a significant dampening effect on FDI inflow to Africa, and economic governance institutions on the continent amplify this effect rather than mitigate it. The results further indicate that natural resource endowment, market size, and initial FDI inflows are robust drivers of FDI inflows to Africa, while the roles of financial development and trade openness remained muted. Overall, the study concludes that policymakers in Africa should take urgent steps to strengthen the quality of economic governance institutions as a means of mitigating the excruciating effect of global uncertainty on FDI inflows to Africa. Springer US 2022-01-29 2022 /pmc/articles/PMC8799434/ http://dx.doi.org/10.1007/s10644-021-09378-w Text en © The Author(s), under exclusive licence to Springer Science+Business Media, LLC, part of Springer Nature 2021 This article is made available via the PMC Open Access Subset for unrestricted research re-use and secondary analysis in any form or by any means with acknowledgement of the original source. These permissions are granted for the duration of the World Health Organization (WHO) declaration of COVID-19 as a global pandemic.
spellingShingle Article
Ogbonna, Oliver E.
Ogbuabor, Jonathan E.
Manasseh, Charles O.
Ekeocha, Davidmac O.
Global uncertainty, economic governance institutions and foreign direct investment inflow in Africa
title Global uncertainty, economic governance institutions and foreign direct investment inflow in Africa
title_full Global uncertainty, economic governance institutions and foreign direct investment inflow in Africa
title_fullStr Global uncertainty, economic governance institutions and foreign direct investment inflow in Africa
title_full_unstemmed Global uncertainty, economic governance institutions and foreign direct investment inflow in Africa
title_short Global uncertainty, economic governance institutions and foreign direct investment inflow in Africa
title_sort global uncertainty, economic governance institutions and foreign direct investment inflow in africa
topic Article
url https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8799434/
http://dx.doi.org/10.1007/s10644-021-09378-w
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