TY - JOUR
T1 - FDI and economic activity in Africa
T2 - The role of local financial markets
AU - Adjasi, Charles K.D.
AU - Abor, Joshua
AU - Osei, Kofi A.
AU - Nyavor-Foli, Ernestine E.
PY - 2012/7
Y1 - 2012/7
N2 - This article examines the role local financial markets play in the link between foreign direct investment (FDI) and economic activity. The article uses panel data methods on 32 African countries over the period 1997 to 2008. Our results show that FDI only has a significant effect on economic activity when interacted with financial market variables, namely, private-sector credit and savings. The results of this study imply that FDI is more productive in the presence of well-functioning local financial markets. African governments must therefore pay particular attention to developing further local financial markets to ensure full economic benefits of FDI inflows.
AB - This article examines the role local financial markets play in the link between foreign direct investment (FDI) and economic activity. The article uses panel data methods on 32 African countries over the period 1997 to 2008. Our results show that FDI only has a significant effect on economic activity when interacted with financial market variables, namely, private-sector credit and savings. The results of this study imply that FDI is more productive in the presence of well-functioning local financial markets. African governments must therefore pay particular attention to developing further local financial markets to ensure full economic benefits of FDI inflows.
UR - http://www.scopus.com/inward/record.url?scp=84862732464&partnerID=8YFLogxK
U2 - 10.1002/tie.21474
DO - 10.1002/tie.21474
M3 - Article
AN - SCOPUS:84862732464
SN - 1096-4762
VL - 54
SP - 429
EP - 439
JO - Thunderbird International Business Review
JF - Thunderbird International Business Review
IS - 4
ER -
