Portsmouth Business School
Dr. Chukwuka Onyekwena
Foreign Direct Investment in Africa: Spillovers, determinants and crowding effects
Department: Economics
Email: chukwuka.onyekwena@port.ac.uk
Nationality: Nigeria
Director of Studies: Dr Martin Snell
Year of graduation: N/A
Thesis summary
The inflow of Foreign Direct Investment (FDI) in Africa has surged remarkably in recent times. FDI inflow in Africa has risen from US$ 2.6 billion in 1985 to $36 billion in 2006 (UNCTAD 2008). This dramatic rise in FDI can be attributed to investments from three Asian countries: China, India and Malaysia.
As a result of this development, questions are being asked about the consequences as well as determinants of FDI. My research therefore poses key questions on this regard. Does the presence of foreign firms affect the productivity of domestic firms? Does the nationality of investors affect the determinants of FDI in Africa? Does FDI crowd in or crowd out domestic investment?
Two approaches will be taken towards this investigation. The microeconomic approach involves econometric modelling of spillovers from FDI at the firm level. This will make use of panel data on Nigerian manufacturing firms. On the other hand, macroeconomic approach will involve econometric modelling of determinants of FDI in selected African countries. This also involves estimating the long run impact of FDI on domestic investment.
The major contribution of the research lies in the investigation of the impact of FDI on the movement of domestic firms towards the production frontier and the association of the determinants of FDI to the nationality of the investor.