Asymmetric relationships among financial sector development, corruption, foreign direct investment, and economic growth in sub-Saharan Africa

Figures & data

Table 1. Summary of empirical studies

Authors	Economic techniques	Data range	Geographical area	Findings
	FDI-Growth nexus
Dinh et al. (2019)	Panel-based unit root test, Johansen cointegration test, Vector Error Correction Model (VECM), and Fully Modified OLS (FMOLS)	2000–2014	Four ASEAN countries (Indonesia, Laos, Philippines and Vietnam)	FDI enhances economic growth in long-run but has a negative effect in the short-run.
Lasbrey et al. (2018)	Systematic review	1980 up to 2018	Developing, Developed and Organisation for Economic Co-operation and Development countries	Most studies revealing significant positive effect of FDI on economic growth
Adem and Güvercin (2020)	Panel VAR	1990–2016	25 Sub Saharan African countries	Significant positive effect of FDI on economic growth
	Conditional effect of FSD
Yeboua (2019)	Panel smooth transition regression model	1990–2013	26 African countries	It was revealed that only countries that are found above a particular threshold level of financial development appreciate the growth-enhancing effect of FDI.
Hermes and Lensink (2003)	Estimations with a common constant, with fixed effects and with random effects.	1970–1995	67 developing countries	Instead of human capital, it was discovered that local financial development is necessary for the growth-enhancing effect of FDI to manifest.
Agbloyor et al. (2014)	Panel Instrumental Variable Generalized Method of Moments	1990–2007	Selected African countries	It was discovered that strong financial markets are necessary for private capital flows to have a favourable impact on economic growth.
	Conditional effect of Corruption
Haruna and Bakar (2021)	Driscoll and Kraay standard errors based on the pooled ordinary least squares	1984 to 2018	Five selected sub-Saharan African nation	The interaction term for domestic financial liberalisation and corruption showed a negative influence on growth
Okada and Samreth (2014)	Panel data and the OLS technique	1995 to 2008	130 economies	It was found that the interaction effect of corruption and FDI promote economic growth.

Table 2. Descriptive Statistics

Variable	Obs	Mean	Std. Dev.	Min	Max	SKS	KTS	J-B
GDPPC	881	2156.69	3166.32	111.93	22,942.61	3.03	13.95	5749.59*
DCPS	787	20.46	23.78	0.00	160.13	3.39	15.81	6891.16*
FD	874	0.14	0.11	0.00	0.64	2.36	8.74	2012.80*
FDI	831	4.82	8.42	−11.63	103.34	5.92	52.97	91,295.42*
Trade	814	73.29	37.95	9.96	311.35	1.77	8.44	1427.73*
GFCF	782	21.89	9.24	2.00	81.05	1.33	7.67	942.78*
PoPG	903	2.48	0.94	−2.63	5.03	−0.87	4.75	229.93*
Labor	893	7,378,505.90	10,423,312.00	45,862.00	63,226,720.00	2.81	11.86	4095.41*
CoC	904	−0.65	0.64	−1.91	1.23	0.63	2.91	60.87*

[*] indicate significance at 1%

Table 3. Pairwise correlations Pairwise correlations

Variables	lnGDPPC	lnFDI	FD	lnDCPS	CoC	lnLabour	Trade	GFCF	PoPG
lnGDPPC	1.000
lnFDI	0.167***	1.000
FD	0.611***	0.047	1.000
lnDCPS	0.434***	−0.017	0.722***	1.000
Coc	0.378***	0.126***	0.613***	0.595***	1.000
lnLabour	−0.337***	−0.101***	−0.003	−0.061*	−0.269***	1.000
Trade	0.424***	0.397***	0.297***	0.125***	0.250***	−0.399***	1.000
GFCF	0.299***	0.383***	0.091**	0.108***	0.207***	−0.017	0.308***	1.000
PoPG	−0.300***	0.077**	−0.486***	−0.435***	−0.460***	0.270***	−0.275***	0.141***	1.000

[*], [**], and [***] indicate significance at 10%, 5% and 1% levels respectively.

Table 4. Cross-section dependence

Variable	CD-Test	Average Joint	T mean	Average Absolute Correlation(ρ)
lnGDPPC	107.595***	17.73	0.75	0.77
lnDCPS	54.176***	14.95	0.38	0.55
lnFDI	6.501***	15.29	0.05	0.33
CoC	809	18.67	0.01	0.37
lnLabour	139.877***	19.00	0.94	0.94
Trade	9.094***	16.55	0.06	0.38
GFCF	3.928***	15.37	0.02	0.36
PoPG	6.647***	18.63	0.04	0.52

[*], [**], and [***] indicate significance at 10%, 5% and 1% levels respectively.

Table 5. PESCADF—Test (Unit Root)

Variable	Levels	Difference (1)
lnGDPPC	−3.238***	−11.081***
lnDCPS	0.126	−7.714***
lnLabour	0.268	−9.459***
CoC	−2.073**	−15.590***
lnFDI	−6.595***	−19.684***
Trade	−0.713	−13.053***
GFCF	−0.905	−12.365***
PopG	1.620	−5.705***

Table 6. Direct relationships

Quantiles	LnFDI	lnDCPS	CoC	LnLabour	Trade	GFCF	PoPG
0.05	0.057***	0.299***	0.238***	−0.052***	−0.001**	0.010***	−0.199***
0.15	0.094***	0.222***	0.175***	−0.139***	−0.002***	0.023***	−0.206***
0.25	0.024***	0.373***	0.094***	−0.140***	−0.001***	0.018***	−0.081***
0.35	0.036***	0.480***	0.103***	−0.144***	−0.001***	0.014***	−0.101***
0.50	−0.037**	0.360***	−0.164***	−0.073***	0.004***	0.020***	−0.409***
0.65	−0.074***	0.551***	−0.312***	−0.177***	0.003***	0.029***	−0.311***
0.75	−0.098***	0.569***	−0.108***	−0.187***	0.007***	0.029***	−0.233***
0.85	−0.061***	0.639***	−0.245***	−0.119***	0.009***	0.028***	0.082***
0.90	−0.061***	0.639***	−0.245***	−0.119***	0.009***	0.028***	0.082***

[*], [**], and [***] indicate significance at 10%, 5% and 1% levels respectively.

Table 7. Direct relationships with interaction from Corruption

Quantiles	LnFDI	lnDCPS	CoC	INTCoC	LnLabour	Trade	GFCF	PoPG
0.05	0.064**	0.328***	0.270***	−0.042*	−0.099***	−0.003***	0.010***	−0.153***
0.15	0.050***	0.261***	0.244***	−0.077***	−0.136***	−0.002***	0.021***	−0.181***
0.25	−0.035***	0.408***	0.157***	−0.153***	−0.179***	−0.003***	0.023***	−0.172***
0.35	−0.141***	0.375***	0.291***	−0.189***	−0.094***	−0.001***	0.021***	−0.190***
0.50	−0.172***	0.502***	0.032***	−0.243***	−0.153***	0.000***	0.027***	−0.355***
0.65	−0.092***	0.439***	−0.122***	−0.116***	−0.102***	0.003***	0.032***	−0.389***
0.75	−0.072***	0.526***	−0.028***	−0.036***	−0.184***	0.006***	0.034***	−0.319***
0.85	−0.072***	0.701***	−0.164***	−0.060***	−0.231***	0.008***	0.022***	0.146***
0.90	−0.047***	0.656***	−0.148***	0.020***	−0.234***	0.007***	0.031***	0.153***

[*], [**], and [***] indicate significance at 10%, 5% and 1% levels respectively.

Table 8. Direct relationships with interaction of FSD

Quantiles	LnFDI	lnDCPS	CoC	INTDCPS	LnLabour	Trade	GFCF	PoPG
0.05	−0.123***	0.190***	0.221***	0.079***	−0.024***	0.000***	0.007***	−0.199***
0.15	0.147***	0.219***	0.226***	−0.016***	−0.151***	−0.004***	0.020***	−0.188***
0.25	−0.054***	0.224***	−0.031***	0.028***	−0.186***	−0.006***	0.020***	−0.185***
0.35	−0.088***	0.469***	−0.091***	0.039***	−0.130***	−0.001***	0.020***	−0.199***
0.50	−0.073***	0.440***	−0.177***	0.036***	−0.134***	0.001	0.026***	−0.412***
0.65	−0.070***	0.567***	−0.266***	0.010***	−0.166***	0.003***	0.030***	−0.324***
0.75	−0.080***	0.421***	−0.038***	0.014***	−0.131***	0.005***	0.033***	−0.291***
0.85	−0.088***	0.696***	−0.249***	0.015**	−0.233***	0.012***	0.024***	0.149***
0.90	−0.087***	0.664***	−0.185***	0.019***	−0.181***	0.008***	0.025***	0.181***

[*], [**], and [***] indicate significance at 10%, 5% and 1% levels respectively.

Table 9. Direct relationships

quantiles	0.05	0.15	0.25	0.35	0.50	0.65	0.75	0.85	0.95
	lnGDPPC	lnGDPPC	lnGDPPC	lnGDPPC	lnGDPPC	lnGDPPC	lnGDPPC	lnGDPPC	lnGDPPC
FD	5.434***	5.727***	5.306***	4.908***	5.542***	5.722***	5.700***	5.707***	5.747***
lnFDI	0.0462***	0.0770***	0.0303***	−0.0372	−0.103***	−0.0368***	−0.0436***	−0.0458***	−0.0461***
CoC	0.124***	0.118***	0.156***	0.0107	−0.115***	−0.127***	−0.141***	−0.162***	−0.0843***
lnLabour	−0.163***	−0.149***	−0.153***	−0.139***	−0.149***	−0.188***	−0.159***	−0.170***	−0.155***
Trade	0.001***	0.002**	0.009***	−0.0001	0.002***	0.0002***	0.0014***	0.00085***	0.00103***
GFCF	0.0230***	0.0309***	0.0263***	0.0238***	0.0301***	0.0269***	0.0264***	0.0280***	0.0266***
PoPG	−0.0733***	−0.105***	−0.204***	−0.216*	−0.0681**	−0.107***	−0.0834***	−0.100***	−0.134***
N	680	680	680	680	680	680	680	680	680

[*], [**], and [***] indicate significance at 10%, 5% and 1% levels respectively

Table 10. Results of interaction of FDI with FDI

	0.05	0.15	0.25	0.35	0.50	0.65	0.75	0.85	0.95
	lnGDPPC	lnGDPPC	lnGDPPC	lnGDPPC	lnGDPPC	lnGDPPC	lnGDPPC	lnGDPPC	lnGDPPC
FD	5.910***	5.813***	5.470***	5.572***	5.654***	5.805***	5.605***	5.741***	5.870***
lnFDI	−0.0309***	0.000446	−0.0232*	−0.00873	−0.0186***	0.0603***	−0.0134***	−0.0251***	−0.00972***
INTFD	−0.0851*	−0.268***	−0.172***	−0.252***	−0.0897***	−0.469***	−0.161***	−0.0789***	−0.204***
CoC	−0.178***	−0.163***	−0.133***	−0.180***	−0.142***	−0.144***	−0.130***	−0.158***	−0.174***
lnLabour	−0.192***	−0.190***	−0.166***	−0.188***	−0.182***	−0.158***	−0.177***	−0.177***	−0.185***
Trade	−0.000274**	−0.000384	0.000185	−0.000885***	−0.000336***	0.00119***	−0.000316***	−0.000214***	−0.000306***
GFCF	0.0272***	0.0258***	0.0294***	0.0281***	0.0288***	0.0222***	0.0290***	0.0297***	0.0285***
PoPG	−0.121***	−0.160***	−0.117***	−0.145***	−0.125***	−0.172***	−0.116***	−0.113***	−0.117***
N	680	680	680	680	680	680	680	680	680

[*], [**], and [***] indicate significance at 10%, 5% and 1% levels respectively

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