FDI and economic growth in SADC region

Gibogwe, Vincent and Nigo, Ayine and Kufuor, Karen (2022): FDI and economic growth in SADC region.

Abstract

The Southern African Development Community (SADC) has continued to experience an unprecedented increase in foreign direct investment (FDI) inflows for the past three decades. Evidence on their quantitative impact on the economy is still quite mixed. We use panel data methods on data from the (SADC) for the 1980–2020 period where our results show that FDI has a positive and statistically significant effect on economic growth; thus agreeing with some work that has been done on the community and in Sub-Saharan Africa. Our study calls for the development of human capital, promotion of market liberlisation, the improvement of financial sector and the need for policy measures that prioritise productive investment that is supportive of local private as well as foreign sector; the latter does provide positive spillovers to other sectors.

• Item Type: MPRA Paper
• Language: English
• Keywords: foreign direct investment; liberalisation; investment; economic growth
• Subjects: O - Economic Development, Innovation, Technological Change, and Growth > O5 - Economywide Country Studies > O55 - Africa

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