The effect of foreign direct investment on the economic growth of Sub-Saharan African countries: An empirical approach

Figures & data

Table 1. Variable descriptions, measurement, and expected signs

Variables	Description	Measurement	Expected sign
gdppgr	GDP per capita growth rate	%
fdi	Foreign direct investment	% of GDP	+
gcf	Gross capital formation	% of GDP	+
topnss	Trade openness	% of GDP	+
remit	Remittance inflows	% of GDP	+
popg	Population growth	%	-

Source: Author.

Table 2. Panel unit root test result

Variables	Test	LLC	IPS	ADF	PP	Status
gdppgr	At level	−8.299***	−10.577***	203.054***	355.462***	I(0)
fdi	At level	−3.185***	−3.872***	91.07***	150.043***	I(0)
gcf	At level	−2.694***	−3.368***	82.292***	103.868***	I(0)
topnss	At level	−1.104	−1.110	44.205	64.792**	I(1)
topnss	At first difference	−9.222***	−13.770***	263.493***	516.193***
remit	At level	−4.794***	−2.341***	84.787***	68.867***	I(0)
popg	At level	−10.668***	−14.112***	270.117***	102.242***	I(0)

Note: ** and *** indicates 5% and 1% significance level.

Source: Author’s computation.

Table 3. Panel co-integration test result

Tests	Statistic	Prob.	Weighted statistic	Prob.
Within dimension
Panel v-Statistic	−1.5588	0.9405	−3.7356	0.9999
Panel rho-Statistic	−2.8963	0.0019***	−2.1265	0.0167**
Panel PP-Statistic	−15.6963	0.0000***	−14.8761	0.0000***
Panel ADF-Statistic	−7.2526	0.0000***	−6.6113	0.0000***
Between dimension
Group rho-Statistic	−1.8081	0.0353
Group PP-Statistic	−22.4801	0.0000***
Group ADF-Statistic	−7.4704	0.0000***

Note: ** and *** indicates 5% and 1% significance level.

Source: Author’s computation.

Table 4. Estimation results

	Dynamic fixed effect		Mean group		Pooled mean group
Variables	Long run	Short run	Long run	Short run	Long run	Short run
ECT		−1.032***		−1.103***		−0.859***
		(0.0383)		(0.0497)		(0.0689)
D.fdi		−0.0856		0.207		−0.0575
		(0.0619)		(0.211)		(0.0936)
D.gcf		0.105**		−0.0254		0.119
		(0.0442)		(0.0814)		(0.0781)
D.topnss		−0.0615***		−0.0429		−0.0450
		(0.0214)		(0.0683)		(0.0506)
D.remit		−0.430**		−0.209		0.0506
		(0.208)		(1.186)		(1.279)
D.popg		0.0174		10.31		5.141
		(0.337)		(6.840)		(3.938)
fdi	0.106		−0.359*		0.138**
	(0.0725)		(0.214)		(0.0673)
gcf	0.0902***		0.219***		0.0992***
	(0.0313)		(0.0766)		(0.0313)
topnss	−0.00170		0.0273		0.0287**
	(0.0113)		(0.0309)		(0.0132)
remit	0.168*		0.0767		−0.0102
	(0.100)		(0.401)		(0.0647)
popg	0.464**		0.601		0.137
	(0.202)		(1.974)		(0.209)
Constant		−2.185**		−5.571		−2.434***
		(1.027)		(4.748)		(0.322)
Observations	.	.	682	682	682	682
Hausman test1	Prob>chi2 = 0.3870
Hausman test2	Prob>chi2 = 0.4880

Standard errors in parentheses.

Note: *** p < 0.01, ** p < 0.05, * p < 0.1 indicates 1%, 5% and 10% significance level respectively.

Source: Author’s computation.