Assessing the Impacts of Capital Inflows on Domestic Economy across the Sub-Saharan Africa Countries |
| |
Authors: | Jian Zhang Thomas Ward |
| |
Institution: | 1. World Bank Group, Washington, DC 20433, USA;2. TWConsult, 8115 Gale Street, Annandale, VA 22003, USA |
| |
Abstract: | Using GMM models, this paper analyzes the impacts of capital inflows on domestic investment in 44 Sub-Saharan Africa (SSA) countries from 2003–2012. It is found that foreign direct investment across the SSA remains to be the largest percentage share, accounting for 35% of the total capital inflows. FDI inflows have significant positive impacts on domestic investment across the SSA in both short term and long term. Other key macroeconomic factors such as age dependency ratio, domestic economic growth, terms of trade, real effective exchange rate and trade openness also play vital roles in determining domestic investment. |
| |
Keywords: | Capital flow foreign direct investment Sub-Saharan Africa |
|
|