This study contributes to the empirical literature by investigating the mediation effects of import (IMP) in the linkages between inflows of foreign direct investment (FDI), and gross domestic product (GDP) for Sub-Sahara African Countries (SSA). The purpose of this study is to investigate how FDI contributes directly and indirectly to gross domestic product (GDP) through IMP. The FDI- IMP –GDP nexus has been neglected by researchers and policymakers. Commonly used methods in various publications analyzed the relationship among two variables without considering mediator variable. The study uses Baron and Kenny method, Bootstrap procedure, Sobel test to perform mediation analysis, and test the significance of the indirect effect respectively. Using data for annual 2018 for 39 SSA countries, the study finds a partial mediation of import in the relationship between FDI and GDP. The study demonstrates that effect of FDI on GDP is carried by increasing IMP. It is therefore recommended that SSA countries should stimulate FDI to bring new technology needed to increase exports, and gross domestic product through international trade. However, imports should be controlled to give priority in use of domestic goods and services.
Inhaltsverzeichnis (Table of Contents)
- Introduction
- Literature Review
- Methodology
- Descriptive statistics
- Mediation Analysis Result
- Research Results
- Result discussion
- Conclusion
- Reference
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This study aims to investigate the mediation effects of imports (IMP) in the relationship between foreign direct investment (FDI) and gross domestic product (GDP) in Sub-Saharan African countries. The study investigates how FDI contributes both directly and indirectly to GDP through IMP, a relationship often neglected by researchers and policymakers. The study explores the complex relationship between FDI, imports, and GDP, aiming to contribute to a more nuanced understanding of the role of FDI in economic growth.
- The impact of FDI on GDP in Sub-Saharan Africa.
- The role of imports as a mediator in the FDI-GDP relationship.
- The importance of understanding the indirect effects of FDI on economic growth.
- The implications of the findings for policymakers in Sub-Saharan Africa.
Zusammenfassung der Kapitel (Chapter Summaries)
The introduction discusses the understudied nature of the FDI-IMP-GDP nexus and the need for quantitative research in this area. It highlights the limitations of previous research that focused solely on direct effects of FDI, neglecting the crucial role of indirect effects. The chapter also contextualizes the study within the broader literature on FDI's impact on economic growth. The literature review provides a detailed examination of existing research on FDI, imports, and GDP, highlighting key findings and identifying gaps in the literature. The methodology section outlines the specific methods employed in the study, including the Baron and Kenny method, the Bootstrap procedure, and the Sobel test, used to perform mediation analysis and test the significance of the indirect effect.
Schlüsselwörter (Keywords)
The study focuses on key terms like foreign direct investment (FDI), imports (IMP), gross domestic product (GDP), mediation, and Sub-Saharan African countries. The study seeks to clarify the relationship between these variables and analyze the role of imports as a mediator in the relationship between FDI and GDP.
Frequently Asked Questions
How does FDI influence GDP in Sub-Saharan Africa?
Foreign Direct Investment (FDI) contributes to Gross Domestic Product (GDP) both directly and indirectly, specifically by increasing imports of technology and capital goods.
What is the role of imports as a mediator in economic growth?
Imports act as a mediator by carrying the effects of FDI into the domestic economy, particularly through the introduction of new technologies needed for production and trade.
What statistical methods were used in this study?
The study utilized the Baron and Kenny method, the Bootstrap procedure, and the Sobel test to analyze the mediation effects and their significance.
Should SSA countries encourage all types of imports?
The study recommends stimulating FDI for technology, but also suggests that imports should be controlled to prioritize the use of domestic goods and services where possible.
How many countries were included in the SSA study?
The research used annual data from 2018 for 39 Sub-Saharan African countries to find a partial mediation of imports in the FDI-GDP relationship.
- Quote paper
- Antoine Niyungeko (Author), 2020, The mediation effects of import on FDI and GDP in Sub-Sahara African countries, Munich, GRIN Verlag, https://www.grin.com/document/935557
