Governance and Domestic Investment in Africa
The study empirically examined the impact of governance on domestic investment in 16 African countries with a balanced panel data set, between the years 2002 and 2015. The study employed six unbundled governance indicators from the World Bank, World Governance Indicators and constructed three bundle...
| Main Author: | |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
University of A Coruna
2019-06-01
|
| Series: | European Journal of Government and Economics |
| Subjects: | |
| Online Access: | http://revistas.udc.es/index.php/ejge/article/view/4565 |
| _version_ | 1819088795328315392 |
|---|---|
| author | Chimere Okechukwu Iheonu |
| author_facet | Chimere Okechukwu Iheonu |
| author_sort | Chimere Okechukwu Iheonu |
| collection | DOAJ |
| description | The study empirically examined the impact of governance on domestic investment in 16 African countries with a balanced panel data set, between the years 2002 and 2015. The study employed six unbundled governance indicators from the World Bank, World Governance Indicators and constructed three bundled governance indicators using the Principal Component Analysis. The Driscoll and Kraay Fixed Effects model which accounts for serial correlation, groupwise heteroskedasticity and cross-sectional dependence were employed with empirical results revealing that all the indicators of governance positively and significantly influence domestic investment in Africa, except for government effectiveness which happens to be insignificant. Also, Voice/Accountability and the Control of Corruption exert more influence on domestic investment as indicated by their coefficient values. Furthermore, economic growth is also an important factor in explaining domestic investment in Africa. Policy recommendations are discussed. |
| first_indexed | 2024-12-21T21:57:43Z |
| format | Article |
| id | doaj.art-8d479a37d41f4a6383bd0a5dcc96cb82 |
| institution | Directory Open Access Journal |
| issn | 2254-7088 |
| language | English |
| last_indexed | 2024-12-21T21:57:43Z |
| publishDate | 2019-06-01 |
| publisher | University of A Coruna |
| record_format | Article |
| series | European Journal of Government and Economics |
| spelling | doaj.art-8d479a37d41f4a6383bd0a5dcc96cb822022-12-21T18:48:55ZengUniversity of A CorunaEuropean Journal of Government and Economics2254-70882019-06-018110.17979/ejge.2019.8.1.4565Governance and Domestic Investment in AfricaChimere Okechukwu Iheonu0University of Nigeria, Nsukka, NigeriaThe study empirically examined the impact of governance on domestic investment in 16 African countries with a balanced panel data set, between the years 2002 and 2015. The study employed six unbundled governance indicators from the World Bank, World Governance Indicators and constructed three bundled governance indicators using the Principal Component Analysis. The Driscoll and Kraay Fixed Effects model which accounts for serial correlation, groupwise heteroskedasticity and cross-sectional dependence were employed with empirical results revealing that all the indicators of governance positively and significantly influence domestic investment in Africa, except for government effectiveness which happens to be insignificant. Also, Voice/Accountability and the Control of Corruption exert more influence on domestic investment as indicated by their coefficient values. Furthermore, economic growth is also an important factor in explaining domestic investment in Africa. Policy recommendations are discussed.http://revistas.udc.es/index.php/ejge/article/view/4565governancedomestic investmentAfricaPrinciple Component Analysis; PCAfixed effects model |
| spellingShingle | Chimere Okechukwu Iheonu Governance and Domestic Investment in Africa European Journal of Government and Economics governance domestic investment Africa Principle Component Analysis; PCA fixed effects model |
| title | Governance and Domestic Investment in Africa |
| title_full | Governance and Domestic Investment in Africa |
| title_fullStr | Governance and Domestic Investment in Africa |
| title_full_unstemmed | Governance and Domestic Investment in Africa |
| title_short | Governance and Domestic Investment in Africa |
| title_sort | governance and domestic investment in africa |
| topic | governance domestic investment Africa Principle Component Analysis; PCA fixed effects model |
| url | http://revistas.udc.es/index.php/ejge/article/view/4565 |
| work_keys_str_mv | AT chimereokechukwuiheonu governanceanddomesticinvestmentinafrica |