Foreign Direct Investment in Sub-Saharan Africa: Motivating Factors and Policy Issues |
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Authors: | Frank L Bartels Sadiq N Alladina Suman Lederer |
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Institution: | 1. Unit Chief, Strategic Research and Regional Analyses Unit (PCT/RST/SRR) , United Nations Industrial Development Organization (UNIDO) , Vienna, Austria f.bartels@unido.org;3. LaSalle Investment Management , Toronto, Ontario, Canada;4. Strategic Research and Regional Analyses Unit (PCT/RST/SRR) , United Nations Industrial Development Organization (UNIDO) , Vienna, Austria |
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Abstract: | Sub-Saharan Africa's (SSA) foreign direct investment (FDI) share has persistently averaged 1% of global flows. The location decision and perceptions of investors are therefore instructive for policy making. This article factor analyses a survey of perceptions, operations, and motivations of 758 foreign investors in 10 SSA countries. We find that the provision of transaction cost–reducing information on industries and markets and utility services to investors before and after a firm's FDI decision are significant factors. FDI location decision in SSA is influenced strongly by political economy considerations. Labor and production input variables are not influential. |
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Keywords: | factor analysis foreign direct investment sub-Saharan Africa |
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