Why Foreign Direct Investment Goes Towards Central Africa ?

Abstract

This article examines the determinants of foreign direct investment in Central Africa. We use a theory based on the OLI paradigm of Dunning (1980). The estimation technique is panel data. We obtained the following main results: (i) high rates of GDP growth attract foreign investment, (ii) oil production, human capital and trade openness also promotes the entry of FDI in Central Africa (iii) the study also show that the amplifier FDI effect would be greater if a real national investment policy is implemented. The economic policy recommendations of the study are: (i) the authorities must intensify the fight against corruption and reduce inflation; (ii) encourage private investment and (iii) modernizing infrastructure to facilitate transactions and transport of products.

Keywords: Foreign Direct Investment, traditional determinants, institutional determinants, territorial attractiveness, panel data.