The nexus among foreign direct investment in renewable electricity industry, renewable electricity production, and economic growth in Africa

Figures & data

Figure 1. FDI in renewable electricity industry in Africa over 2003–2019 (Source: fDi Markets, 2020).

Figure 2. The most invested countries in the renewable electricity industry in Africa over 2003–2019. (Source: fDi Markets, 2020).

Figure 3. Renewable electricity capacity and generation in Africa over 2003–2019 (Source: IRENA, 2015, 2020).

Table 1. Descriptive statistics

Variable	Obs	Mean	Std.Dev.	Min	Max
FDIREI	544	112.552	462.664	0	5000
REP	544	44.163	35.664	0	99.968
GDP	544	4.728	7.37	−62.076	123.14

Table 2. Correlation matrix

Variables	(1)	(2)	(3)
(1) FDIREI	1.000
(2) REP	−0.121	1.000
(3) GDP	−0.033	0.072	1.000

Table 3. Result of Pesaran’s test (2004) cross-sectional Independence

Pesaran’s test of cross sectional independence = 3.675, Pr = 0.0002

Average absolute value of the off-diagonal elements = 0.189

Note: The P-value at 1 percent level.

Table 4. Result of Frees’s test (1995, 2004) cross-sectional Independence

Frees’ test of cross sectional independence = 0.470

Critical values from Frees’ Q distribution

alpha = 0.10: 0.1521

alpha = 0.05: 0.1996

alpha = 0.01: 0.2928

Table 5. Results of Harris-Tzavalis panel unit-root test

Variables	Roots at	Statistics	Z score	P value
FDIREI	Rho at level	0.0735	−25.0187	0.0000
REP	Rho at level	0.6241	−6.8890	0.0000
GDP	Rho at level	−0.2522	−35.7431	0.0000

Table 6. Results of Pesaran (CIPS) panel unit-root test

Stationarity	FDIREI	REP	GDP
level	−4.065	−2.263	−2.586

Note: Critical values at 10%, 5%, 1% are −1.45, −1.54, −1.7, respectively.

Table 7. Results of OLS and random effects panel models

FDIREI	Coef.	Robust St.Err.	P-value	Sig
OLS model
REP	0.288	0.537	0.592
GDP	−0.658	1.055	0.533
Constant	−82.067	49.242	0.096	*
Random effects model
REP	0.288	0.541	0.594
GDP	−0.658	1.288	0.609
Constant	−82.067	39.784	0.039	**
Hausman test Chi-square test value	Coef. 2.565		P-value .277

*** p < 0.01, ** p < 0.05, * p < 0.1

Table 8. Lag selection-order criteria

Lag	LL	LR	df	p	FPE	AIC	HQIC	SBIC
0	−4717.84				3.5e+10	32.7836	32.7989	32.8218
1	−4564.64	306.41	9	0.000	1.3e+10	31.7822	31.8434	31.9348
2	−4515.22	98.824	9	0.000	9.6e+09*	31.5016*	31.6086*	31.7686*
3	−4509.36	11.731	9	0.229	9.8e+09	31.5233	31.6762	31.9049
4	−4502.36	13.994	9	0.123	1.0e+10	31.5372	31.736	32.0333
5	−4497	10.714	9	0.296	1.0e+10	31.5625	31.8072	32.173
6	−4491.54	10.938	9	0.280	1.0e+10	31.5871	31.8776	32.312
7	−4481.75	19.57*	9	0.021	1.0e+10	31.5816	31.918	32.421
8	−4478.63	6.2454	9	0.715	1.1e+10	31.6224	32.0047	32.5763

Table 9. Panel VAR-Granger causality Wald test

Null hypothesis	Chi-square	df	P-value
Non-causality REP ➔ FDIREI	1.539	2	0.463
Non-causality GDP ➔ FDIREI	0.467	2	0.792
Non-causality FDIREI ➔ REP	0.403	2	0.817
Non-causality GDP ➔ REP	1.692	2	0.429
Non-causality FDIREI ➔ GDP	2.709	2	0.258
Non-causality REP ➔ GDP	7.291	2	0.026*

* 5% significance level.

Table 10. Result of heteroskedasticity-robust Born and Breitung (2016) HR-test

Variable	HR-stat	p-value	N	maxT	balance?
FDIREI	0.36	0.716	32	17	balanced
REP	0.96	0.337	32	17	balanced
GDP	−0.82	0.413	32	17	balanced

Notes: Under H0, HR ~ N (0,1)

H0: No first-order serial correlation.

Ha: Some first order serial correlation.

Table 11. Result of variance inflation factor

Independent Variables	FDIREI-GDP	GDP-REP	REP-FDIREI
VIF	1.001	1.005	1.015
Mean VIF	1.001	1.005	1.015

Table 12. Panel vector autoregresssion. GMM Estimation. Final GMM Criterion Q (b) = 1.86e-33. Initial weight matrix: Identity. GMM weight matrix: Robust

	Coef.	Std.Err.	z	P > z	[95%Conf.	Interval]
FDIREI (Dep.Var.) FDIREI
L1.	0.258	0.146	1.770	0.077	−0.028	0.544
L2.	0.502	0.190	2.640	0.008	0.130	0.875
REP
L1.	1.078	1.921	0.560	0.575	−2.687	4.842
L2.	−0.723	0.884	−0.820	0.414	−2.456	1.011
GDP
L1.	1.778	3.474	0.510	0.609	−5.030	8.587
L2.	1.964	3.095	0.630	0.526	−4.103	8.031
REP (Dep.Var.)
FDIREI
L1.	0.001	0.002	0.490	0.622	−0.002	0.004
L2.	−0.000	0.001	−0.300	0.763	−0.003	0.002
REP
L1.	0.920	0.117	7.860	0.000	0.690	1.149
L2.	0.260	0.119	2.200	0.028	0.028	0.493
GDP
L1.	0.209	0.161	1.300	0.194	−0.107	0.525
L2.	0.048	0.109	0.450	0.655	−0.164	0.261
GDP (Dep.Var.)
FDIREI
L1.	0.000	0.000	0.910	0.361	−0.000	0.001
L2.	−0.000	0.000	−0.820	0.410	−0.001	0.000
REP
L1.	0.053	0.021	2.490	0.013*	0.011	0.094
L2.	0.028	0.018	1.590	0.111	−0.007	0.063
GDP
L1.	−0.228	0.263	−0.870	0.387	−0.743	0.288
L2.	−0.042	0.127	−0.330	0.743	−0.290	0.207

* 5% significance level.

Table 13. Random effects and OLS estimation

Independent Variables	RE (FDIREI)	RE2 (REP)	RE3 (GDP)	OLS (FDIREI)	OLS2 (REP)	OLS3 (GDP)
L2FDIREI	0.455	−0.003	−0.001	0.455	−0.003	−0.001
L2REP	−0.714	0.707	0.016*	−0.714	0.707	0.016*
L2GDP	0.537	−0.152	−0.021	0.537	−0.152	−0.021
_cons	90.479	14.195	4.177	90.479	14.195	4.177

* 5% significance level. L2 implies 2 lags.

Figure 4. Plot of cumulative sum of recursive residuals.

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