Foreign Direct Investment, Military Expenditure and Foreign Aid in Sub-Saharan Africa (Panel Data Analysis)

14 Pages Posted: 29 Oct 2020

See all articles by Migbaru Alamirew Workneh

Migbaru Alamirew Workneh

University of Insubria, Department of Economics

Date Written: June 1, 2015

Abstract

In this study, we tried to see the impact of military expenditure and foreign aid on foreign direct investment in Sub-Saharan Africa using a panel data analysis. Based on the results obtained from the fixed effect estimation model, Net Official Development Assistance (ODA) can increase the inflow of foreign direct investment in Sub-Saharan African countries. Military expenditure can also increase the inflow of FDI. The result from the estimation is aligned with the argument of some researchers (like Anyanwu (2012) and Jakobsen (2010)) that foreign aid and military expenditure can increase the inflow of foreign direct investment to developing countries, including Sub-Saharan African countries.

Keywords: Foreign Direct Investment, Military Expenditure, Foreign Aid, Panel Data Analysis, Sub-Saharan Africa

JEL Classification: E00, E02, F21, F23, F35

Suggested Citation

Workneh, Migbaru Alamirew, Foreign Direct Investment, Military Expenditure and Foreign Aid in Sub-Saharan Africa (Panel Data Analysis) (June 1, 2015). Available at SSRN: https://ssrn.com/abstract=3689786 or http://dx.doi.org/10.2139/ssrn.3689786

Migbaru Alamirew Workneh (Contact Author)

University of Insubria, Department of Economics ( email )

Italy

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