Is foreign direct investment globalization‐induced or a myth? A tale of Africa
Foreign direct investment (FDI) provides many African countries an important source of capital inflow. Despite notable improvements in these capital-scarce countries' economic, political, and social conditions, foreign investors have not considered them viable host locations. Since FDI brings e...
| Main Authors: | , , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
John Wiley & Sons, Ltd.
2021
|
| Subjects: | |
| Online Access: | https://eprints.nottingham.ac.uk/64720/ |
| _version_ | 1848800156953083904 |
|---|---|
| author | Aluko, Olufemi Adewale Chen, George S. Opoku, Eric Evans Osei |
| author_facet | Aluko, Olufemi Adewale Chen, George S. Opoku, Eric Evans Osei |
| author_sort | Aluko, Olufemi Adewale |
| building | Nottingham Research Data Repository |
| collection | Online Access |
| description | Foreign direct investment (FDI) provides many African countries an important source of capital inflow. Despite notable improvements in these capital-scarce countries' economic, political, and social conditions, foreign investors have not considered them viable host locations. Since FDI brings enormous spillovers to its host, some countries have recently institutionalized globalization as the catalyst for reversing the trend. Against this backdrop, we examine the FDI–globalization nexus across 47 African countries for the 1996–2016 period. Using the augmented mean group estimator, the results suggest that FDI in Africa is indeed globalization-induced. Moreover, we find this positive nexus to be driven by the economic dimension of globalization. Overall, we demonstrate the potential of globalization in stimulating an FDI boom in Africa. |
| first_indexed | 2025-11-14T20:47:05Z |
| format | Article |
| id | nottingham-64720 |
| institution | University of Nottingham Malaysia Campus |
| institution_category | Local University |
| language | English |
| last_indexed | 2025-11-14T20:47:05Z |
| publishDate | 2021 |
| publisher | John Wiley & Sons, Ltd. |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | nottingham-647202021-03-10T06:07:31Z https://eprints.nottingham.ac.uk/64720/ Is foreign direct investment globalization‐induced or a myth? A tale of Africa Aluko, Olufemi Adewale Chen, George S. Opoku, Eric Evans Osei Foreign direct investment (FDI) provides many African countries an important source of capital inflow. Despite notable improvements in these capital-scarce countries' economic, political, and social conditions, foreign investors have not considered them viable host locations. Since FDI brings enormous spillovers to its host, some countries have recently institutionalized globalization as the catalyst for reversing the trend. Against this backdrop, we examine the FDI–globalization nexus across 47 African countries for the 1996–2016 period. Using the augmented mean group estimator, the results suggest that FDI in Africa is indeed globalization-induced. Moreover, we find this positive nexus to be driven by the economic dimension of globalization. Overall, we demonstrate the potential of globalization in stimulating an FDI boom in Africa. John Wiley & Sons, Ltd. 2021-02-15 Article PeerReviewed application/pdf en cc_by https://eprints.nottingham.ac.uk/64720/1/Is%20foreign%20direct%20investment%20globalization%E2%80%90induced%20or%20a%20myth%20A%20tale%20of%20Africa.pdf Aluko, Olufemi Adewale, Chen, George S. and Opoku, Eric Evans Osei (2021) Is foreign direct investment globalization‐induced or a myth? A tale of Africa. International Journal of Finance & Economics . ISSN 1076-9307 FDI; Globalization; Multinational corporations; Augmented Mean Group; Panel data; Africa http://dx.doi.org/10.1002/ijfe.2555 doi:10.1002/ijfe.2555 doi:10.1002/ijfe.2555 |
| spellingShingle | FDI; Globalization; Multinational corporations; Augmented Mean Group; Panel data; Africa Aluko, Olufemi Adewale Chen, George S. Opoku, Eric Evans Osei Is foreign direct investment globalization‐induced or a myth? A tale of Africa |
| title | Is foreign direct investment globalization‐induced or a myth? A tale of Africa |
| title_full | Is foreign direct investment globalization‐induced or a myth? A tale of Africa |
| title_fullStr | Is foreign direct investment globalization‐induced or a myth? A tale of Africa |
| title_full_unstemmed | Is foreign direct investment globalization‐induced or a myth? A tale of Africa |
| title_short | Is foreign direct investment globalization‐induced or a myth? A tale of Africa |
| title_sort | is foreign direct investment globalization‐induced or a myth? a tale of africa |
| topic | FDI; Globalization; Multinational corporations; Augmented Mean Group; Panel data; Africa |
| url | https://eprints.nottingham.ac.uk/64720/ https://eprints.nottingham.ac.uk/64720/ https://eprints.nottingham.ac.uk/64720/ |