Authors : Shiri Tawanda; Tao Xiangxing; Hamuvwimi Ng’andu Daniel

Volume/Issue : Volume 11 - 2026, Issue 8 - August

Google Scholar : https://tinyurl.com/5xyednkj

DOI : https://doi.org/10.38124/ijisrt/26aug1604

Note : A published paper may take 4-5 working days from the publication date to appear in PlumX Metrics, Semantic Scholar, and ResearchGate.

Abstract : Sub-Saharan African governments are advised that deeper financial systems and larger resource endowments insulate foreign direct investment (FDI) from global shocks. We test both on 48 economies, 2000 to 2024. The Global Economic Policy Uncertainty (GEPU) index takes one value per year for every country, so with country but no year effects its coefficient cannot be separated from other global developments. Adding year effects strengthens the resource result by 29 per cent, so the standard design attenuates the effect it seeks. Resource dependence amplifies rather than dampens transmission: a one standard deviation higher oil rent share deepens the FDI response to a one-point rise in GEPU by 0.0087 percentage points of GDP, a contraction 2.1 points deeper over the 2020 spike for an economy at 40 per cent oil rents. Financial development does neither, and the null excludes protection above a quarter of a percentage point.

Keywords : Foreign Direct Investment; Global Economic Policy Uncertainty; Natural Resource Rents; Financial Development; Sub-Saharan Africa.

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