International Journal of Developing and Emerging Economies (IJDEE)

EA Journals

institutional quality

Institutional Quality, Foreign Direct Investment and Sustainable Economic Growth in Emerging African Economies (Published)

Foreign direct investment (FDI) is an essential determinant of development for Africa. It encourages sustainable economic growth. However, in most African economies, quality of institution plays a vital role in enhancing the inflow of FDI. The objective of this study therefore is to examine the effect of institutional quality, foreign direct investments on sustainable economic growth in emerging African economies. The study employed pooleddata for 8 African countries (Nigeria, Botswana, Ghana, Kenya, Mozambique, Tanzania, Uganda and Zambia) using the panel data methodology for the period within the years 1990 and 2020. The paper adopted the fixed effect regression model based on the results of the Hausman test in estimating the effect institutional quality, FDI inflows and sustainable economic growth in emerging African economies.  The variables of the model included; GDP per capita GDPPC, foreign direct investment FDI, domestic investment DOMINV, corruption perception index CPI, political stability POLSTAB and exchange rate EXR. The study found and concluded that using panel fixed effect, institutional quality, (proxy with corruption perception index CPI and political stability POLSATB) and FDI both have a significant relationship with sustainable economic growth in emerging African economies. The study therefore recommends that Governments in these nations need to create and encourage a conducive environment that will increase FDI inflows in the various sectors of the economy since the results of the study have shown its growth enhancing capability. Control of corruption and political stability has shown to aid and encourage the entrenchment of rule of law, democracy and justice. Corrupt tendencies need to be reduced to the barest minimum. Exchange rate stability is to be pursued vigorously and attained in other to attract investments (domestic and foreign)

Keywords: FDI, institutional quality, sustainable economic growth and emerging African economies.

Scroll to Top

Don't miss any Call For Paper update from EA Journals

Fill up the form below and get notified everytime we call for new submissions for our journals.