The long-run and short-run effects of foreign direct investment on financial development in African countries
2019
Online
report
Zugriff:
This paper contributes to the understanding of the other neglected effects of foreign direct investment by analysing how foreign direct investment affects financial development in the short-run and long-run for a panel of 49 African countries over the period 1990-2016. The empirical evidence is based on Pooled Mean Group (PMG) approach. With three panels differentiated by income level, the following findings are established: first, while there is a positive and significant long-run relationship between foreign direct investment and financial development in Africa, in the short-run the effect of foreign direct investment on financial development is negative. Second, the effect of foreign direct investment is positive and significant in the long-run in the three sub-samples. However, in the short-run, the effect of foreign direct investment is negative and significant in lower-income countries and non-significant in lower-middle-income and upper-middle-income countries. Overall we find a strong evidence supporting the view that foreign direct investment promotes financial development in African countries in the long-run.
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The long-run and short-run effects of foreign direct investment on financial development in African countries
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Autor/in / Beteiligte Person: | Njangang, Henri ; Luc, Nembot Ndeffo ; Nawo, Larissa |
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Veröffentlichung: | 2019 |
Medientyp: | report |
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