Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/303656 
Year of Publication: 
2022
Citation: 
[Journal:] Cogent Economics & Finance [ISSN:] 2332-2039 [Volume:] 10 [Issue:] 1 [Article No.:] 2078459 [Year:] 2022 [Pages:] 1-22
Publisher: 
Taylor & Francis, Abingdon
Abstract: 
This study examines the role of human capital and institutional quality on the impact of foreign direct investment (FDI) on poverty in sub-Sahara Africa (SSA). In achieving this, a balanced panel of 30 SSA countries from 1996 to 2018 was explored using fixed-effect instrumental regression, fixed effect panel threshold model, and the heterogenous Granger-causality test. There are three main important findings from this empirical study: (1) FDI does not have a direct impact on the incidence and intensity of poverty. (2) the impact of FDI is contingent on the absorptive capacity of the host country. The study further reveals that FDI will alleviate poverty conditions if interacted with human capital and institutional quality at a given threshold. (3) bidirectional causality between FDI and poverty. This study recommends that in addition to FDI's promotional policies, governments of SSA countries need to improve investment in human capital. It is also important for SSA countries to embark on public sector reforms, as investments do not thrive in an environment characterized by high corruption or political instability.
Subjects: 
Poverty
Foreign direct investment
Absorptive capacity
Instrumental regression
Fixed-effect panel threshold model
heterogenous Granger-causality test
subSaharan African countries
JEL: 
F23
I30
E24
E02
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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