Michael Atingi-Ego, Sayed O. M. Timuno, Tiviniton Makuve
This paper discusses recent debt trends and evaluates performance of debt sus- tainability analysis (DSA) conducted in a sample of Sub-Saharan African (SSA) countries over the period 2008 – 16. Based on qualitative and quantitative analyses, the findings suggest the existence of systematic optimism bias in past DSA vintages resulting from optimistic macro-economic projections that underpin the DSAs. As a result, the DSAs for the sample countries analysed projected higher debt carrying capacities, which in most cases led to a faster pace of debt accumulation during this period. Moreover, this was not helped by the fact that average interest rates on new debt commitments were rising faster relative to gross domestic product growth rates, while the necessary fiscal adjustment to counter this development remained insufficient. Countercyclical policies supported by fiscal buffers that were used to address the impact of the 2008 global financial crisis have largely not been reversed despite the erosion of the buffers and a pick-up in growth in some countries. As a result, the overall risk of debt distress in the region has deteriorated in the past decade. Going forward, strengthening analytical/research work on country macroeconomic projections underlying their DSAs, relationship between investment and growth, impact of natural disasters on DSA frameworks and quantifying and monitoring fiscal risks would be important pieces of work in leveraging DSA results for financing and policy decisions. Other supporting issues to embrace include capacity building to enhance quality of policies, transparency and accountability at institutional level; managing roll over risk; developing and implementing sound debt management strategies. to these questions will help flag potential debt vulnerabilities and provide insight into the plausibility of macroeconomic frameworks used to underpin DSAs. The findings will also provide guidance on whether there is a need for a thorough scrutiny of the process leading to elaboration of assumptions underlying DSAs. For MEFMI and its technical cooperating partners, the findings will highlight areas in which
{"title":"Public Debt Accumulation in SSA: A Looming Debt Crisis","authors":"Michael Atingi-Ego, Sayed O. M. Timuno, Tiviniton Makuve","doi":"10.1093/JAE/EJAB023","DOIUrl":"https://doi.org/10.1093/JAE/EJAB023","url":null,"abstract":"This paper discusses recent debt trends and evaluates performance of debt sus- tainability analysis (DSA) conducted in a sample of Sub-Saharan African (SSA) countries over the period 2008 – 16. Based on qualitative and quantitative analyses, the findings suggest the existence of systematic optimism bias in past DSA vintages resulting from optimistic macro-economic projections that underpin the DSAs. As a result, the DSAs for the sample countries analysed projected higher debt carrying capacities, which in most cases led to a faster pace of debt accumulation during this period. Moreover, this was not helped by the fact that average interest rates on new debt commitments were rising faster relative to gross domestic product growth rates, while the necessary fiscal adjustment to counter this development remained insufficient. Countercyclical policies supported by fiscal buffers that were used to address the impact of the 2008 global financial crisis have largely not been reversed despite the erosion of the buffers and a pick-up in growth in some countries. As a result, the overall risk of debt distress in the region has deteriorated in the past decade. Going forward, strengthening analytical/research work on country macroeconomic projections underlying their DSAs, relationship between investment and growth, impact of natural disasters on DSA frameworks and quantifying and monitoring fiscal risks would be important pieces of work in leveraging DSA results for financing and policy decisions. Other supporting issues to embrace include capacity building to enhance quality of policies, transparency and accountability at institutional level; managing roll over risk; developing and implementing sound debt management strategies. to these questions will help flag potential debt vulnerabilities and provide insight into the plausibility of macroeconomic frameworks used to underpin DSAs. The findings will also provide guidance on whether there is a need for a thorough scrutiny of the process leading to elaboration of assumptions underlying DSAs. For MEFMI and its technical cooperating partners, the findings will highlight areas in which","PeriodicalId":51524,"journal":{"name":"Journal of African Economies","volume":"30 1","pages":""},"PeriodicalIF":1.6,"publicationDate":"2021-11-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49124323","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Child Labour and the Arrival of Refugees: Evidence from Tanzania","authors":"Chiara Kofol, Maryam Naghsh Nejad","doi":"10.1093/JAE/EJAB026","DOIUrl":"https://doi.org/10.1093/JAE/EJAB026","url":null,"abstract":"","PeriodicalId":51524,"journal":{"name":"Journal of African Economies","volume":" ","pages":""},"PeriodicalIF":1.6,"publicationDate":"2021-10-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46473831","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We use spatial maize prices in Mozambique to measure transport cost reductions, attribute these reductions to road distance and road quality and assess to what extent producers, traders and consumers benefit. For identification we exploit a unique natural experiment, the construction of a new road bridge over the Zambezi River, which connects the north and south of Mozambique. The applied methodology allows for potentially oligopolistic traders with spatially varying mark-ups. Estimations are based on monthly maize prices, in 22 markets, for 5 years before and after the introduction of the bridge. Estimates of transport cost reductions, averaged over routes, vary from 3% to 7%, with large heterogeneity between routes, and roughly for two-third due to road distance and for one-third due to road quality. On average benefits of trade cost reductions are equally shared between traders and consumers, but for larger distances, a larger part accrues to traders. The evidence also indicates a reduction in prices in destination markets due to the bridge. Results are supported by observed transport cost data, robust for non-random bridge placement and strict source-destination rules.
{"title":"Measuring Trade Cost Reductions Through a New Bridge in Mozambique: Who Benefits From Transport Infrastructure?","authors":"W. Zant","doi":"10.1093/jae/ejab018","DOIUrl":"https://doi.org/10.1093/jae/ejab018","url":null,"abstract":"\u0000 We use spatial maize prices in Mozambique to measure transport cost reductions, attribute these reductions to road distance and road quality and assess to what extent producers, traders and consumers benefit. For identification we exploit a unique natural experiment, the construction of a new road bridge over the Zambezi River, which connects the north and south of Mozambique. The applied methodology allows for potentially oligopolistic traders with spatially varying mark-ups. Estimations are based on monthly maize prices, in 22 markets, for 5 years before and after the introduction of the bridge. Estimates of transport cost reductions, averaged over routes, vary from 3% to 7%, with large heterogeneity between routes, and roughly for two-third due to road distance and for one-third due to road quality. On average benefits of trade cost reductions are equally shared between traders and consumers, but for larger distances, a larger part accrues to traders. The evidence also indicates a reduction in prices in destination markets due to the bridge. Results are supported by observed transport cost data, robust for non-random bridge placement and strict source-destination rules.","PeriodicalId":51524,"journal":{"name":"Journal of African Economies","volume":" ","pages":""},"PeriodicalIF":1.6,"publicationDate":"2021-08-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42862777","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper lays the groundwork for more effective multisectoral action on reducing stunting, by analysing and generating empirical evidence useful for informing the joint targeting of nutrition-sensitive interventions in the countries in Sub-Saharan Africa. Using information from 33 recent Demographic and Health Surveys, measures are constructed to capture a child’s access to food security, care practices, healthcare and water, sanitation and hygiene (WASH), in order to identify gaps in access among different socio-economic groups and relate access to these nutrition drivers with nutrition outcomes. Three main questions are addressed. (a) What is the extent to which children have inadequate access to the underlying determinants of nutrition? (b) What is the association between stunting and overlapping deprivations in adequate food and care practices, health and WASH services? (c) What are the sectors that have the greatest impact on stunting?
{"title":"Reducing Stunting through Multisectoral Efforts in Sub-Saharan Africa","authors":"E. Skoufias, K. Vinha, Ryoko Sato","doi":"10.1093/jae/ejaa016","DOIUrl":"https://doi.org/10.1093/jae/ejaa016","url":null,"abstract":"\u0000 This paper lays the groundwork for more effective multisectoral action on reducing stunting, by analysing and generating empirical evidence useful for informing the joint targeting of nutrition-sensitive interventions in the countries in Sub-Saharan Africa. Using information from 33 recent Demographic and Health Surveys, measures are constructed to capture a child’s access to food security, care practices, healthcare and water, sanitation and hygiene (WASH), in order to identify gaps in access among different socio-economic groups and relate access to these nutrition drivers with nutrition outcomes. Three main questions are addressed. (a) What is the extent to which children have inadequate access to the underlying determinants of nutrition? (b) What is the association between stunting and overlapping deprivations in adequate food and care practices, health and WASH services? (c) What are the sectors that have the greatest impact on stunting?","PeriodicalId":51524,"journal":{"name":"Journal of African Economies","volume":" ","pages":""},"PeriodicalIF":1.6,"publicationDate":"2021-08-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45813395","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Public debt levels in sub-Saharan Africa rose sharply in the wake of the global financial crisis, and a number of countries are now classified by the World Bank and International Monetary Fund as at high risk of debt distress. By contrast with the debt crisis of the 1980s and 1990s, however, concerns were not region wide as recently as early 2020, and the policy environment for growth remains robust for the majority of countries in the region. The external environment nonetheless poses a set of region-wide risks that include the economic effects of the COVID-19 pandemic and are exacerbated by the increase in market-based debt and the retreat of the Paris Club among official creditors. Changes in perceived creditworthiness can now drive distress, and new challenges of creditor coordination will complicate the debt restructuring process. We motivate a research agenda that focuses on development assets at risk as rising debt service obligations crowd out development as well as operational and maintenance budgets. Preserving and enhancing these assets, which include advances in human capital and infrastructure and an improved investment environment, should be a central objective of domestic policy actions, preventative debt restructurings and institutional approaches to debt distress.
{"title":"Africa’s Development Debts","authors":"Benno J Ndulu, Stephen A O’Connell","doi":"10.1093/jae/ejab021","DOIUrl":"https://doi.org/10.1093/jae/ejab021","url":null,"abstract":"Public debt levels in sub-Saharan Africa rose sharply in the wake of the global financial crisis, and a number of countries are now classified by the World Bank and International Monetary Fund as at high risk of debt distress. By contrast with the debt crisis of the 1980s and 1990s, however, concerns were not region wide as recently as early 2020, and the policy environment for growth remains robust for the majority of countries in the region. The external environment nonetheless poses a set of region-wide risks that include the economic effects of the COVID-19 pandemic and are exacerbated by the increase in market-based debt and the retreat of the Paris Club among official creditors. Changes in perceived creditworthiness can now drive distress, and new challenges of creditor coordination will complicate the debt restructuring process. We motivate a research agenda that focuses on development assets at risk as rising debt service obligations crowd out development as well as operational and maintenance budgets. Preserving and enhancing these assets, which include advances in human capital and infrastructure and an improved investment environment, should be a central objective of domestic policy actions, preventative debt restructurings and institutional approaches to debt distress.","PeriodicalId":51524,"journal":{"name":"Journal of African Economies","volume":"5 1","pages":""},"PeriodicalIF":1.6,"publicationDate":"2021-07-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"138531828","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Recent studies have found that resource-rich low-income countries are better off investing their resource revenues domestically rather than saving them abroad in a sovereign wealth fund (SWF). This paper finds an optimal rule-based policy of accumulating public capital and its associated public investment path in a perfect foresight general equilibrium model. The model has several specific features different from the existing frameworks: the policy rule for public capital is introduced. Public investment is inefficient and has its absorptive capacity constraint costs. External savings clear the government budget. There is a variable share of resource revenues to accumulate the SWF, and the natural resource sector is assumed to be capital-intensive with its foreign direct investment shock. Based on calibration for African countries, the study finds that the front-loaded public investment path is optimal given an initial one-period resource windfall, public investment inefficiency and absorptive capacity constraints in the economies. This result also holds under less productive public capital and more patient households, while a scenario of no resource windfall produces the welfare loss due to a steady increase in consumption tax to finance public investment.
{"title":"Optimal Public Investment in Resource-Rich Low-Income Countries","authors":"Aliya Algozhina","doi":"10.1093/JAE/EJAB016","DOIUrl":"https://doi.org/10.1093/JAE/EJAB016","url":null,"abstract":"\u0000 Recent studies have found that resource-rich low-income countries are better off investing their resource revenues domestically rather than saving them abroad in a sovereign wealth fund (SWF). This paper finds an optimal rule-based policy of accumulating public capital and its associated public investment path in a perfect foresight general equilibrium model. The model has several specific features different from the existing frameworks: the policy rule for public capital is introduced. Public investment is inefficient and has its absorptive capacity constraint costs. External savings clear the government budget. There is a variable share of resource revenues to accumulate the SWF, and the natural resource sector is assumed to be capital-intensive with its foreign direct investment shock. Based on calibration for African countries, the study finds that the front-loaded public investment path is optimal given an initial one-period resource windfall, public investment inefficiency and absorptive capacity constraints in the economies. This result also holds under less productive public capital and more patient households, while a scenario of no resource windfall produces the welfare loss due to a steady increase in consumption tax to finance public investment.","PeriodicalId":51524,"journal":{"name":"Journal of African Economies","volume":" ","pages":""},"PeriodicalIF":1.6,"publicationDate":"2021-07-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49375659","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-07-07eCollection Date: 2022-08-01DOI: 10.1093/jae/ejab013
Neha Agarwal, Hans-Peter Kohler, Subha Mani
The average prevalence of disability in most African countries is 10%, but for many it exceeds the global disability prevalence rate of 15%. The extent to which this disability capturing functional and activity limitations results in permanent job loss, lowered lifetime income and assets, in part, depends upon the extent to which the onset of limitations becomes permanent. In this paper, we use five rounds of longitudinal data from rural Malawi, a low-income African country with high prevalence of disability, to examine path dependence in activity limitations. We estimate a dynamic linear panel data model where the coefficient on the one-period lagged health outcome captures path dependence in limitations. Our preferred Arellano-Bover estimates show that males experience partial persistence in both the incidence and intensity of severe limitations and no persistence in other limitations. Females, on the other hand, exhibit no persistence in any type of limitations. Our findings have important policy implications for computing the long-term costs associated with onset of activity limitations as these costs can be moderated by the recovery exhibited in these limitations.
{"title":"Path Dependence in Disability.","authors":"Neha Agarwal, Hans-Peter Kohler, Subha Mani","doi":"10.1093/jae/ejab013","DOIUrl":"10.1093/jae/ejab013","url":null,"abstract":"<p><p>The average prevalence of disability in most African countries is 10%, but for many it exceeds the global disability prevalence rate of 15%. The extent to which this disability capturing functional and activity limitations results in permanent job loss, lowered lifetime income and assets, in part, depends upon the extent to which the onset of limitations becomes permanent. In this paper, we use five rounds of longitudinal data from rural Malawi, a low-income African country with high prevalence of disability, to examine path dependence in activity limitations. We estimate a dynamic linear panel data model where the coefficient on the one-period lagged health outcome captures path dependence in limitations. Our preferred Arellano-Bover estimates show that males experience partial persistence in both the incidence and intensity of severe limitations and no persistence in other limitations. Females, on the other hand, exhibit no persistence in any type of limitations. Our findings have important policy implications for computing the long-term costs associated with onset of activity limitations as these costs can be moderated by the recovery exhibited in these limitations.</p>","PeriodicalId":51524,"journal":{"name":"Journal of African Economies","volume":"31 4","pages":"329-354"},"PeriodicalIF":1.4,"publicationDate":"2021-07-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://www.ncbi.nlm.nih.gov/pmc/articles/PMC9340751/pdf/ejab013.pdf","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"40690155","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In this paper, we investigate the link between windfall gains and losses of income associated with commodity exports and economic performance in a panel of 45 sub-Saharan African (SSA) countries over the period from 1990 to 2019. Windfall gains and losses of income are measured in terms of fluctuations in a country-specific commodity terms of trade (CTOT) index in which each commodity is weighted by the ratio of exports of that commodity in the country’s gross domestic product (GDP). The CTOT index therefore reflects the commodity export specialisation for individual countries. The data on CTOT are taken from the International Monetary Fund. Additionally, we use changes in real GDP per capita as our SSA economic performance measure. We employ a random coefficient model that yields individual estimates for each of the countries included in the analysis. Our approach is based on the assumption that the effect of windfall gains and losses on real GDP per capita growth varies across different SSA countries. Our main conclusion can be elaborated as follows: first, natural resources have undoubtedly contributed to higher economic growth in SSA countries since 1990. Second, when SSA countries are analytically divided into two groups depending on their commodity export specialisation, we find that resource-rich countries—in particular oil rich—are the best economic growth performers during the observation period. Finally, we find that windfall gains from commodity exports are not significantly associated with increased real GDP per capita growth in most agriculture-exporting countries.
{"title":"Natural Resources, International Commodity Prices and Economic Performance in Sub-Saharan Africa (1990–2019)","authors":"Ben Katoka, Jörg Michael Dostal","doi":"10.1093/JAE/EJAB014","DOIUrl":"https://doi.org/10.1093/JAE/EJAB014","url":null,"abstract":"\u0000 In this paper, we investigate the link between windfall gains and losses of income associated with commodity exports and economic performance in a panel of 45 sub-Saharan African (SSA) countries over the period from 1990 to 2019. Windfall gains and losses of income are measured in terms of fluctuations in a country-specific commodity terms of trade (CTOT) index in which each commodity is weighted by the ratio of exports of that commodity in the country’s gross domestic product (GDP). The CTOT index therefore reflects the commodity export specialisation for individual countries. The data on CTOT are taken from the International Monetary Fund. Additionally, we use changes in real GDP per capita as our SSA economic performance measure. We employ a random coefficient model that yields individual estimates for each of the countries included in the analysis. Our approach is based on the assumption that the effect of windfall gains and losses on real GDP per capita growth varies across different SSA countries. Our main conclusion can be elaborated as follows: first, natural resources have undoubtedly contributed to higher economic growth in SSA countries since 1990. Second, when SSA countries are analytically divided into two groups depending on their commodity export specialisation, we find that resource-rich countries—in particular oil rich—are the best economic growth performers during the observation period. Finally, we find that windfall gains from commodity exports are not significantly associated with increased real GDP per capita growth in most agriculture-exporting countries.","PeriodicalId":51524,"journal":{"name":"Journal of African Economies","volume":" ","pages":""},"PeriodicalIF":1.6,"publicationDate":"2021-07-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46007829","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We study a set of interventions in Ethiopia geared towards eliminating child marriage. The interventions facilitate community discussion about child marriage and provide economic incentives for girls to stay in school and remain unmarried. Changing social norms is often thought of as very difficult, and if there is a marriage penalty to being among the first to deviate to an older age of marriage, raising the typical age at first marriage could be especially challenging. Regardless, using weighting and a difference-in-differences approach, we find that both interventions reduce the probability a girl from 8 to 17 years old has been married by about 4 to 7 percentage points. We observe some positive spillover effects: the program appears to have increased the intra-household decision-making power of women. However, we also find suggestive evidence of increased polarisation in beliefs about child marriage, including some possible backlash especially among men. No robust effects were seen on education outcomes, suggesting that, in contrast to other studies, this was not the mechanism through which the intervention had an effect.
{"title":"Challenges in Changing Social Norms: Evidence from Interventions Targeting Child Marriage in Ethiopia","authors":"Vinci Chow, Eva Vivalt","doi":"10.1093/jae/ejab010","DOIUrl":"https://doi.org/10.1093/jae/ejab010","url":null,"abstract":"\u0000 We study a set of interventions in Ethiopia geared towards eliminating child marriage. The interventions facilitate community discussion about child marriage and provide economic incentives for girls to stay in school and remain unmarried. Changing social norms is often thought of as very difficult, and if there is a marriage penalty to being among the first to deviate to an older age of marriage, raising the typical age at first marriage could be especially challenging. Regardless, using weighting and a difference-in-differences approach, we find that both interventions reduce the probability a girl from 8 to 17 years old has been married by about 4 to 7 percentage points. We observe some positive spillover effects: the program appears to have increased the intra-household decision-making power of women. However, we also find suggestive evidence of increased polarisation in beliefs about child marriage, including some possible backlash especially among men. No robust effects were seen on education outcomes, suggesting that, in contrast to other studies, this was not the mechanism through which the intervention had an effect.","PeriodicalId":51524,"journal":{"name":"Journal of African Economies","volume":" ","pages":""},"PeriodicalIF":1.6,"publicationDate":"2021-06-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41634520","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Over the past two decades, Africa has witnessed a dramatic increase in foreign direct investment (FDI) despite a lack of significant changes in infrastructure and the host country’s policies. What are the motives to invest in Africa? How do these investment motives differ for firms from developed and emerging markets? Several studies empirically tested these questions, however, provided inconclusive results. By taking 735 estimates extracted from 51 studies and applying advanced meta-analysis techniques, this study examines the motives of FDI in Africa. We found that compared to market-seeking motive, the effect size of resource seeking and efficiency seeking is larger (smaller) on FDI attractiveness in Africa. In terms of effect size, the impact of asset-seeking motive on FDI is statistically comparable to that of market-seeking motive. Contrary to general perceptions, the impact of natural resources on FDI attractiveness in Africa is not different from market seeking for developed countries’ firms. Our results show that compared to GDP per capita, the effect size of accessing minerals and oil reserves on FDI attractiveness in Africa is positive and significant for global and emerging market firms. Our research shows that there is more likelihood of type I and type II publication selection bias in this research field.
{"title":"Investment Motives in Africa: What Does the Meta-Analytic Review Tell?","authors":"A. Anwar, I. Iwasaki, U. Dornberger","doi":"10.1093/jae/ejab011","DOIUrl":"https://doi.org/10.1093/jae/ejab011","url":null,"abstract":"\u0000 Over the past two decades, Africa has witnessed a dramatic increase in foreign direct investment (FDI) despite a lack of significant changes in infrastructure and the host country’s policies. What are the motives to invest in Africa? How do these investment motives differ for firms from developed and emerging markets? Several studies empirically tested these questions, however, provided inconclusive results. By taking 735 estimates extracted from 51 studies and applying advanced meta-analysis techniques, this study examines the motives of FDI in Africa. We found that compared to market-seeking motive, the effect size of resource seeking and efficiency seeking is larger (smaller) on FDI attractiveness in Africa. In terms of effect size, the impact of asset-seeking motive on FDI is statistically comparable to that of market-seeking motive. Contrary to general perceptions, the impact of natural resources on FDI attractiveness in Africa is not different from market seeking for developed countries’ firms. Our results show that compared to GDP per capita, the effect size of accessing minerals and oil reserves on FDI attractiveness in Africa is positive and significant for global and emerging market firms. Our research shows that there is more likelihood of type I and type II publication selection bias in this research field.","PeriodicalId":51524,"journal":{"name":"Journal of African Economies","volume":"1 1","pages":""},"PeriodicalIF":1.6,"publicationDate":"2021-06-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41381903","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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