The role of institutional quality on the impact of Chinese foreign direct investments and human capital development on macroeconomic performance in the CEMAC zone

Abstract

This paper investigates the role of institutional quality in terms of governance on the impact of Chinese foreign direct investments and human capital development on the macroeconomic performance of the CEMAC zone between 2003 and 2020. The data were analyzed using descriptive statistics and the Correlated Panels Corrected Standard Errors (PCSEs) Approach. The findings indicated that poor governance performance in the CEMAC zone deteriorates the effects of Chinese foreign direct investments and human capital development on the macroeconomic performance of the CEMAC zone. At the same time, poor governance performance also deteriorates the impact of foreign aid and personal remittances received on the macroeconomic performance of the CEMAC zone. This study strongly recommends measures to improve institutional quality such as increased training on ethical thinking in all forms of education, meritocratic recruitment to the civil service, and auditing of public finances and services.