Ease of doing business and foreign direct investment inflow among Sub-Sahara African countries
by Clement Nangpiire; Ricardo Gouveia Rodrigues; Ibrahim Osman Adam
International Journal of Business and Emerging Markets (IJBEM), Vol. 10, No. 3, 2018

Abstract: This study assesses the ease of doing business and foreign direct investment (FDI) inflows among Sub-African countries. Its purpose is to establish whether formal procedures of doing business have a positive relationship with FDI inflow in these countries. The study used 44 Sub-Sahara African countries data and the ease of doing business index given by the World Bank. The paper analysed these countries on their ease of doing business indicators and FDI inflow into these countries. It included all the ten sub-indicators of ease of doing business: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts, and resolving insolvency. The result shows an R-square of (.555) which means that FDI change of 56% is explained by the model. The paper also found that, protecting minority investors, trading across borders and resolving insolvency are statistically significant at influencing FDI in the sub-region. It concludes that the ease of doing business indicators have an overall statistical influence in attracting FDIs into Sub-Sahara African countries. Therefore, the finding will help governments/policy makers to adjust their ease of doing business procedures in order to attract FDI.

Online publication date: Wed, 04-Jul-2018

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