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The interrelationships between foreign direct investment and economic growth in Africa

There has been a long search for the keys to development and economic growth in Africa. This study investigates the relationship between FDI and economic growth over the period 2000-2012 using data from 48 African countries. On the aggregate regional level FDI and economic growth were found to be positively correlated during this period. Using panel data econometric techniques and the Panel Granger Causality test, results revealed that a bi-directional causality relationship existed between FDI and GDP. Thus, the results suggest that GDP is a requirement for increased investment, and at the same time is the result of increased foreign investment. Thus, the conclusion is that African policy makers are justified in increasing their attempts to create an attractive business environment for foreign investors, as it is beneficial for economic growth.

Identiferoai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:rhodes/vital:1123
Date January 2015
CreatorsBolani, Lindelwa Mandisa
PublisherRhodes University, Faculty of Commerce, Economics
Source SetsSouth African National ETD Portal
LanguageEnglish
Detected LanguageEnglish
TypeThesis, Masters, MCom
Format159 leaves, pdf
RightsBolani, Lindelwa Mandisa

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