Foreign Direct Investment and Domestic Private Investment in Sub-Saharan African Countries: Crowding-In or Out ?

This paper investigates the relationship between FDI and private investment in Sub-Saharan Africa (SSA), using a sample of 40 countries over 1980-2017. To disentangle short term from long-term dynamics, our empirical analysis is based on Pooled Mean Group (PMG), (MG) Dynamic Full Effects (DFE) models. We find that has little effect run but significant crowding-in effects long-run: one percentage point increase share GDP leads to 0.29% rise investment, long run. Our results also show interacts with public domestic boost these positive effects. Finally, we impact stronger non-natural resource exporting diversified as opposed non-diversified commodity exporters.