Title: Effects of democracy and natural resources on foreign direct investment in African natural resource-rich countries

Authors: Dramane Abdoulaye

Addresses: Faculty of Economics and Management, Research Unit in Economics and Management, University of Parakou, Benin

Abstract: This article aims to investigate the effects of democracy and natural resources on foreign direct investment (FDI) in African countries rich in natural resources. To this end, an econometric model was estimated using three methods, namely, fixed effects with sample heteroscedasticity correction, the instrumental variables method and the general method of moments, on a panel of 22 countries over the period 2000-2017. On the one hand, the results show that democracy has a positive effect on FDI. On the other hand, the analysis showed that natural resources do not help to attract FDI. Our findings suggest that concrete actions are needed in terms of strengthening and improving governance and democratic institutions to better attract FDI in African countries rich in natural resources.

Keywords: democracy; foreign direct investment; FDI; natural resources; panel data; Africa.

DOI: 10.1504/IJSD.2023.129144

International Journal of Sustainable Development, 2023 Vol.26 No.1, pp.51 - 70

Received: 19 May 2022
Received in revised form: 29 Nov 2022
Accepted: 19 Dec 2022
Published online: 22 Feb 2023 *