The Long-Run Effect of FDI Inflows on Total Factor Productivity: Evidence from African Countries
Abstract
From 2001-2014, had foreign direct investment inflows had significant long-term effects on total factor productivity in African countries. Following the latest dynamic techniques of panel data analysis of pooled mean group and mean group estimator (the Pesaran and Smith 1995, Journal of Econometrics 68: 79-113), we find strong evidence of insignificant impact of FDI inflows on total factor productivity. Augmented mean group estimator(AMG) introduced by Eberhardt and Teal (2010, Discussion Paper 515, Department of Economics, University of Oxford) and the Pesaran (2006,Econometrica 74: 967-1012) common correlated effects mean group estimator results also strongly support insignificant impact FDI inflows on total factor productivity in the long run in African economies. Augmented mean group estimator, common correlated effects mean group estimator and pooled mean group estimator result findings show that covariates or control variables (Trade and Domestic investment) have significant effects on total factor productivity in the long run. The result findings show that covariates or control variables are important determinants (factors) in defining exact relationship between FDI inflows and total factor productivity.
Keywords: FDI inflows; Total Factor Productivity; Panel Data; Economic growth
JEL Classification numbers: C33; F21; F23
To list your conference here. Please contact the administrator of this platform.
Paper submission email: JESD@iiste.org
ISSN (Paper)2222-1700 ISSN (Online)2222-2855
Please add our address "contact@iiste.org" into your email contact list.
This journal follows ISO 9001 management standard and licensed under a Creative Commons Attribution 3.0 License.
Copyright © www.iiste.org