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The long and short run effects of foreign direct investment on economic complexity in Sub-Saharan African countries

Author

Listed:
  • Jasnine Mogem Kouam

    (University of Dschang)

  • Luc Nembot Ndeffo

    (University of Dschang)

  • Mathurin Aimé Mekam Pouatcha

    (University of Bamenda)

Abstract
This study examines the long and short run effects of foreign direct investment (FDI) on economic complexity using a sample of 21 Sub-Saharan African (SSA) countries over the period 1980-2017. The empirical evidence is based on the pooled mean group methodology. Results reveal a mixed impact of FDI on economic complexity. In particular, we found that FDI stimulates economic complexity in the long run whilst a negative relationship is observed in the short run. Remittances, corruption, health and GDP are found to be determinants of economic complexity. Furthermore, robustness checks show that regardless of the level of income our results are confirmed. Finally, our findings were robust when using the System Generalized Method of Moments (SGMM) as an alternative estimator.

Suggested Citation

  • Jasnine Mogem Kouam & Luc Nembot Ndeffo & Mathurin Aimé Mekam Pouatcha, 2023. "The long and short run effects of foreign direct investment on economic complexity in Sub-Saharan African countries," Economics Bulletin, AccessEcon, vol. 43(3), pages 1421-1433.
    • Handle: RePEc:ebl:ecbull:eb-23-00222
    as

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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Economic complexity; Foreign Direct investment; Sub-Saharan Africa; Pooled mean group; System Generalized Method of Moments.;
    All these keywords.

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance

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