Investment and Economic Growth

The current study intended to investigate the effect of foreign direct investment (FDI) on economic growth in Africa and provide an estimate of panel data on 50 African countries during 1980-2009 based on a dynamic panel data estimator (SYSGMM) 1 developed by Blundell and Bond (1998). The results of the present study indicated that foreign direct investment flow had a significant effect on economic growth in Africa during the research period. Furthermore, it found that low human resources did not restrict the effect of foreign direct investment and, subsequently, foreign direct investment had a significant negative effect on economic growth during 1980- 1994 while it had a positive effect during 1995- 2009.