Official Development Assistance and Foreign Direct Investment and Their Implications for Domestic Capital Formation in Africa: An Empirical Investigation

Cleeve, Emmanuel and Yiheyis, Z (2018) Official Development Assistance and Foreign Direct Investment and Their Implications for Domestic Capital Formation in Africa: An Empirical Investigation. Annals of Economics and Finance. ISSN 1529-7373

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Official URL: http://aeconf.com/nov2018.htm

Abstract

This study assesses the relationship between Official development assistance (ODA) and foreign direct investment (FDI) and the extent to which each influenced domestically financed capital formation (DFCF) in Africa. An empirical analysis using dynamic panel data estimation methods reveals that both FDI and ODA exerted independent and interactive effects on DFCF in the typical study country. We find that the effect of FDI on DFCF is generally negative, while that of ODA is positive. Whether ODA influenced FDI is observed to depend, in part, on whether the aid was committed to complementary or productive activities in the recipient countries.

Item Type:	Article
Peer-reviewed:	Yes
Date Deposited:	17 Aug 2018 10:43
Publisher:	Peking Univ. Press
Additional Information:	This is an Author Accepted Manuscript of a paper accepted for publication by Peking Univ. Press in Annals of Economics and Finance.
Divisions:
Subject terms:	Africa, Domestic Investment, Dynamic GMM, Foreign Direct Investment, Official Development Assistance, 1402 Applied Economics
URI:	https://e-space.mmu.ac.uk/id/eprint/621258
ISSN	1529-7373

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