Linkages and spillover effects of South African foreign direct investment in Botswana and Kenya

Nandonde, Felix and Adu-Gyamfi, Richard and Mmusi, Tinaye and Wamalwa, Herbert and Asongu, Simplice and Opperman, Johannes and Makindara, Jeremiah (2019): Linkages and spillover effects of South African foreign direct investment in Botswana and Kenya.

Abstract

In recent decades, the impact of South African foreign direct investment in Africa has been captured by research and policy. This paper investigates linkages and spillover effects of South African foreign direct investment in Botswana and Kenya. The study uses primary data to investigate qualitative implications. The findings reveal that South African firms operate in sectors including retail, food-processing, and information and communication technology. Linkages forged in these sectors include supply, employee, joint venture, service, and institutional nexuses. Supply and service linkages create observable spillovers which point to the fact that younger local firms tend to benefit from South African firms in terms of technology transfer and training opportunities. Host country policymakers are therefore encouraged to provide favourable incentives for foreign direct investment to promote entrepreneurship. Other policy implications are also discussed.

• Item Type: MPRA Paper
• Language: English
• Keywords: Foreign direct investment, linkages, spillover effects, South Africa, Botswana, Kenya
• Subjects: E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy > E23 - Production; F - International Economics > F2 - International Factor Movements and International Business > F21 - International Investment ; Long-Term Capital Movements; F - International Economics > F3 - International Finance > F30 - General; L - Industrial Organization > L9 - Industry Studies: Transportation and Utilities > L96 - Telecommunications; L - Industrial Organization > L9 - Industry Studies: Transportation and Utilities > L98 - Government Policy; O - Economic Development, Innovation, Technological Change, and Growth > O5 - Economywide Country Studies > O55 - Africa

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