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AuthorBen Mim, Sami
AuthorHedi, Abir
AuthorBen Ali, Mohamed Sami
Available date2023-01-22T08:12:39Z
Publication Date2022
Publication NameEconomic Change and Restructuring
AbstractThis paper assesses the effect of foreign direct investment (FDI) on the industrialization of African economies. In particular, we address the nonlinearity issue and investigate the role of the recipient countries' absorptive capacities as a catalyst of foreign investments' spillover effects. The empirical framework considers a panel of 46 countries over the 1998-2019 period. The SGMM estimates highlight a two-threshold relationship between FDI and industrial output. FDI should range between an upper and a lower bound to produce a positive effect on domestic industries. Our findings also suggest that weakly industrialized countries and countries endowed with high absorptive capacities are those taking advantage from the spillover effects generated by FDI. Finally, estimation results reveal that financial development, human capital, infrastructure and the legal framework are the main channels through which FDI contributes to promote the industrialization process in Africa. 2021, The Author(s), under exclusive licence to Springer Science+Business Media, LLC, part of Springer Nature.
SubjectAbsorptive capacities
African countries
TitleIndustrialization, FDI and absorptive capacities: evidence from African Countries
Issue Number3
Volume Number55

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