External Debt Accumulation and Foreign Direct Investment Inflows in Sub-Saharan Africa: Analysing the Interaction Effects of Selected Macroeconomic Factors

Q1 Social Sciences

Review of Black Political Economy Pub Date : 2022-04-19 DOI:10.1177/00346446221094872

Chukwuebuka Bernard Azolibe

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引用次数: 3

Abstract

By pooling a sample of 25 countries spanning from 1990–2017, this study analyzed the relationship between external debt accumulation and foreign direct investment inflows in Sub-Saharan Africa. The study employed Panel fixed effects and the Generalized Method of Moments estimation technique in order to address the potential issue of endogeneity. The results of the fixed effects and GMM analysis revealed a significant negative relationship between external debt accumulation and FDI inflows in SSA region. However, when external debt was interacted with macroeconomic variables such as corporate tax, infrastructure development, economic growth and military expenditure, the result shows a positive interaction effect between external debt and infrastructure development on FDI suggesting that external debt can positively influence FDI if channeled into the provision of critical infrastructures. On the other hand, the interaction effect of corporate tax showed a negative relationship between external debt and FDI and provided strong support for the debt overhang theory by Krugman which holds true in SSA region. Finally, economic growth and military expenditure also showed a negative interaction effect.

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撒哈拉以南非洲的外债积累和外国直接投资流入:分析选定宏观经济因素的相互作用

通过收集1990年至2017年期间25个国家的样本，本研究分析了撒哈拉以南非洲地区外债积累与外国直接投资流入之间的关系。为了解决潜在的内生性问题，本研究采用了面板固定效应和广义矩量估计方法。固定效应和GMM分析结果显示，SSA地区外债积累与FDI流入呈显著负相关。然而，当外债与诸如公司税、基础设施发展、经济增长和军事开支等宏观经济变量相互作用时，结果显示外债和基础设施发展对外国直接投资产生了积极的相互作用，这表明，如果将外债用于提供关键基础设施，外债可以对外国直接投资产生积极影响。另一方面，公司税的互动效应显示外债与FDI呈负相关关系，为克鲁格曼的债务悬空理论提供了强有力的支持，该理论在SSA地区成立。最后，经济增长与军费支出也呈现负交互效应。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Review of Black Political Economy Social Sciences-Cultural Studies

CiteScore

2.80

自引率

0.00%

发文量

期刊介绍： The Review of Black Political Economy examines issues related to the economic status of African-American and Third World peoples. It identifies and analyzes policy prescriptions designed to reduce racial economic inequality. The journal is devoted to appraising public and private policies for their ability to advance economic opportunities without regard to their theoretical or ideological origins. A publication of the National Economic Association and the Southern Center for Studies in Public Policy of Clark College.