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Contribution of Foreign Direct Investment to the economic Growth of Sub-Saharan African Countries

Abstract: 

The study is concerned with testing the impacts of foreign direct investment on the economic growth of sub Sahara African countries through its impact on saving. To this end, simultaneous equation model is estimated by treating growth of output and gross domestic saving as endogenous variables and lagged value of FDI and other variables as exogenous variables. Data from twelve sub Sahara African countries over the period of 1987 -2001 is used for the test the estimated result shows that FDI has negative but insignificant direct and total effect on the growth of out put, but it has significant indirect effect on the growth of output through its impact on saving. As the assumption of efficient market and perfect mobility of factors of production seldom hold for these countries, the impact of FDI on economic growth is unsatisfactory and , therefore, it is difficult to generalize from the experience of some Asian countries that FDI has positive contribution to economic growth of other developing countries like sub-Sahara Africa

Corporate Author: 
Alemayehu Seyoum ... [et al.] (editor)
Publisher: 
Ethiopian Economic Association (EEA)
Primary Descriptors: 

Foreign Direct investment

Secondary Descriptor: 

saving

Geographic Descriptors: 
Sub-Saharan African
Cataloge Date: 
02/27/2013
Broad Subject heading: 
economic growth
Call Number: 
330.963 PRO 2005
Serial Key Title: 
Proceedings of the Second International Conference on the Ethiopian Economy
Publication catagory: 
Content type: 
Volume: 
III
Publication date: 
2013-05-27 23:05:00
Forum or Discussion date: 
2013-02-27 15:02:00
Place of publication: 
Addis Ababa, Ethiopia
Type of material: 
Book
Current frequency: 
Annualy