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Bruno Emmanuel Ongo Nkoa
''Determinants of foreign direct investment in Africa: An analysis of the impact of financial development''
( 2018, Vol. 38 No.1 )
This paper investigates the impact of financial development on Foreign Direct Investment (FDI) in 52 African countries under the OLI Dummy's paradigm from 1995 to 2015. The sample is made up of 35 countries without financial market and 17 countries with a financial market. The empirical methodology is based on the Generalized Method of Moments (GMM). Our empirical results show that, money and quasi money, banking credit to private sector and interest rate liberalisation play a positive role on FDI in countries without financial market. Money and quasi money, market capitalisation and financial market value traded positively influence FDI in countries with financial market. The study suggests, with regard to the low level of our estimated coefficients, that African countries need to reinforce their financial reforms.
Keywords: Foreign direct investment, financial development, banking system, stock market, Africa, generalized method of moments
JEL: F2 - International Factor Movements and International Business: General
G2 - Financial Institutions and Services: General
Manuscript Received : Aug 14 2017 Manuscript Accepted : Feb 09 2018

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