Harnessing the Benefits of FDI in African Countries

In this article, we briefly review our own work, and related studies, on the impact of FDI in African countries using firm level data. Overall, research suggests that foreign multinationals can indeed benefit local firms in terms of productivity growth and technology transfer. We also discuss a number of policy options host countries can apply in order to improve their attractiveness to foreign investors. Here we particularly focus on what might be called “Quality FDI,” i.e., those investments which maximize the benefits for the local economy.

Kiel Institute Experts