Linkages and Spillover Effects of South African Foreign Direct Investment in Botswana and Kenya
Research Africa Network WP/19/039
26 Pages Posted: 21 Jul 2019
Date Written: July 21, 2019
In recent decades, the impact of South African foreign direct investment in Africa has been captured by research and policy. This paper investigates linkages and spillover effects of South African foreign direct investment in Botswana and Kenya. The study uses primary data to investigate qualitative implications. The findings reveal that South African firms operate in sectors including retail, food-processing, and information and communication technology. Linkages forged in these sectors include supply, employee, joint venture, service, and institutional nexuses. Supply and service linkages create observable spillovers which point to the fact that younger local firms tend to benefit from South African firms in terms of technology transfer and training opportunities. Host country policymakers are therefore encouraged to provide favourable incentives for foreign direct investment to promote entrepreneurship. Other policy implications are also discussed.
Keywords: Foreign direct investment, linkages, spillover effects, South Africa, Botswana, Kenya
JEL Classification: E23, F21, F30, L96, L98, O55
Suggested Citation: Suggested Citation