The long-run and short-run effects of foreign direct investment, foreign aid and remittances on economic growth in African countries

Henri Njangang (), Luc Nembot Ndeffo, Edmond Noubissi () and Prevost Fosto Koyeu
Authors registered in the RePEc Author Service: Prevost Fotso ()

MPRA Paper from University Library of Munich, Germany

Abstract: This paper investigates the long-run and short-run effects of foreign direct investment (FDI), foreign aid and migrant remittances on economic growth in 36 African countries over the period 1980–2016. Empirical evidence is based on Pooled Mean Group (PMG) approach. The following findings are established. First, while there is a positive and significant long-run relationship between foreign direct investment and economic growth in Africa as a whole, the effect of remittances and foreign aid is insignificant. Second, in the short-run there is no evidence of any significant impact of FDI, remittances and foreign aid on economic growth. Third, results are still robust in the short-run when the panel is divided in three subsamples. However, in the long-run the effects of FDI, remittances and foreign aid on economic growth depend on the income level.

Keywords: FDI; Remittances; Foreign Aid; economic growth; PMG (search for similar items in EconPapers)
JEL-codes: F23 F24 F35 F43 O55 (search for similar items in EconPapers)
Date: 2018-10-28
New Economics Papers: this item is included in nep-afr, nep-fdg, nep-gro and nep-int
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