Effects of Foreign Direct Investment on Industrial Performance in Sub-Saharan Africa: An Empirical Analysis using Spatial Econometric Methods

Authors : Kirsi ZONGO; Mahamadou DIARRA

Volume/Issue : Volume 8 - 2023, Issue 7 - July

Google Scholar : https://bit.ly/3TmGbDi

Scribd : https://tinyurl.com/4cpzantb

DOI : https://doi.org/10.5281/zenodo.8214650

This paper rigorously analyzes the effects of foreign direct investment inflows on the industrial performance in the Sub-Saharan African (SSA) economies. Applying the Durbin spatial method (SDM) on a two-sector model to account for spatial effects, the empirical results show that the higher the capacity of SSA countries to attract foreign investments, the higher is the job-inducing effect and value-added created in the industrial sector, while no technology transfer was induced. This finding highlights the importance for the countries of sub-Saharan Africa to direct foreign direct investment towards strategic sectors where they benefit from comparative advantages and improve the business climate to attract more FDI, a pledge of any industrial development.

Keywords : Foreign Direct Investment, Industrial Performance, Spatial Econometrics, Sub-Saharan Africa.


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31 - December - 2023

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