Tax incentives, ease of doing business and inflows of FDI in Africa: Does governance matter?

Figures & data

Table 1. System-GMM estimate - determinants of FDI inflows in Africa

	Dep. FDI	CoC (1)	GoE (2)	PoS (3)	ReQ (4)	RoL (5)	VoA (6)
SR	L.FDI	0.285*** (0.00)	0.28*** (0.000)	0.263*** (0.000)	0.275*** (0.000)	0.281*** (0.000)	0.276*** (0.001)
	EDB	−0.066** (0.047)	−0.091** (0.026)	−0.059* (0.067)	−0.076 (0.106)	−0.077** (0.042)	−0.058 (0.101)
	TTC	−0.012** (0.019)	−0.01* (0.083)	−0.016*** (0.001)	−0.01 (0.133)	−0.011** (0.049)	−.014*** (0.007)
	EXR	0.132 (0.333)	0.119 (0.396)	0.122 (0.362)	0.041 (0.771)	0.117 (0.395)	0.070 (0.605)
	COC	0.039** (0.025)
	GOE		0.059** (0.026)
	POS			0.039** (0.021)
	REQ				0.046 (0.193)
	ROL					0.042* (0.059)
	VOA						0.030 (0.204)
LR	EDB	−0.093** (0.029)	−0.127** (0.016)	−0.080** (0.043)	−0.105* (0.094)	−0.108** (0.027)	−0.079* (0.080)
	TTC	−0.017*** (0.007)	−0.014* (0.057)	−0.022*** (0.000)		−0.016** (0.027)	−.020*** (0.001)
	COC	0.055** (0.033)
	GOE		0.082** (0.030)
	POS			0.053** (0.021)
	ROL					0.058* (0.067)
	System GMM Diagnostics
	AR (1)	0.006	0.007	0.019	0.015	0.009	0.017 f
	AR (2)	0.253	0.271	0.282	0.251	0.258	0.240
	Hansen J	0.025	0.053	0.027	0.030	0.021	0.016
	No. Instruments	23	23	23	23	23	23
	No. Groups	50	50	50	50	50	50

Standard errors are in parentheses

*** p < .01, ** p < .05, * p < .1

Source: Author’s Calculation through STATA 14

AR (1) and AR (2) denote the Arellano-Bond test for first and second-order serial correlations in the first difference model.

Table 2. System-GMM estimate—EDB interaction with institutional quality indicators

	Dep. FDI	CoC (1)	GoE (2)	PoS (3)	ReQ (4)	RoL (5)	VoA (6)
SR	L.FDI	0.286*** (0.000)	0.313*** (0.000)	0.262*** (0.000)	0.296*** (0.000)	0.241*** (0.004)	0.270*** (0.001)
	EDB	−0.331* (0.079)	−0.412** (0.038)	−0.081 (0.478)	−0.296 (0.191)	−0.134 (0.526)	−0.009 (0.928)
	TTC	−0.008 (0.125)	−0.01* (0.093)	−0.015** (0.027)	−0.005 (0.445)	−0.01* (0.065)	−.015*** (0.004)
	EXR	0.345** (0.031)	0.207 (0.197)	0.146 (0.269)	0.175 (0.240)	0.247 (0.182)	0.037 (0.816)
	EDBCOC	0.008 (0.163)
	COC	−0.393 (0.212)
	EDBGOE		0.009* (0.097)
	GOE		−0.435 (0.143)
	EDBPOS			0.001 (0.840)
	POS			0.006 (0.975)
	EDBREQ				0.006 (0.336)
	REQ				−0.244 (0.433)
	EDBROL					0.001 (0.889)
	ROL					0.007 (0.983)
	EDBVOA						−0.002 (0.558)
	VOA						0.139 (0.431)
LR	EDB	−0.463* (0.090)	−0.600** (0.047)
	TTC	−0.011* (0.088)	−0.014* (0.065)	−0.020** (0.014)		−0.013** (0.035)	−.020*** (0.001)
	EXR	0.483** (0.032)
	EDBGOE		0.014 (0.113)
	System-GMM Diagnostics
	AR (1)	0.006	0.009	0.019	0.032	0.069	0.030
	AR (2)	0.244	0.290	0.314	0.251	0.234	0.234
	Hansen J	0.051	0.088	0.018	0.023	0.058	0.006
	No. Instruments	23	23	23	23	23	23
	No. Groups	50	50	50	50	50	50

Standard errors are in parentheses

*** p < .01, ** p < .05, * p < .1

Source: Authors’ Calculation through STATA 14

AR (1) and AR (2) denote the Arellano-Bond test for first and second-order serial correlations in the first difference model.