Abstract
The aim of this research work is to assess the influence of FDI on economic growth in the CEMAC region. The ratio of FDIs in the actual GDP of countries of the CEMAC region has recorded a steady annual increase for the past three decades. Moreover, the high variability of FDI, given the various crises and fluctuations in the prices of raw materials invites us to reflect and question the impact of FDI on growth by studying the case of CEMAC countries. The theoretical analysis is based on the neoclassical growth theory and its extensions. After the selection of a model crafted from Imoudu (2012) and Boreinsztein et al. (1998). The results show that FDI have a positive impact on the growth of the sub-region and these are conveyed by human capital.
Highlights
The aim of this research work is to assess the influence of FDI on economic growth in the CEMAC region
How do we compare India which has a growth rate of about 5%, having a low FDI level, with Angola, where the importance of FDI goes hand in hand with negative growth, or with Malaysia and China where FDI are correlated with growth (Brewer and Young, 2000)2? The same problem is faced in the CEMAC zone
What justifies the positive correlation of FDI with economic growth in some countries and not in others? This question shows that the impact of FDI on growth depends on interactions that develop with the variables that generally and positively influence growth in developing countries[6]
Summary
The aim of this research work is to assess the influence of FDI on economic growth in the CEMAC region. Economists tend to recognize an overall positive effect of FDI on economic growth in developing countries but with some considerable differences. These differences sprout from rather contrasting stands. FDI is a development tool given that it provides the capital direly needed by these countries and which is necessary to increase investment and competition in the industries in host countries while improving the productivity of local firms through the adoption of more effective technologies or investing in human and / or physical capital. The main problem that the Solow model seeks to answer is based on the following question: "Why are some countries very rich while others remain poor? (Solow, 1957) It uses a CobbDouglas production function which essentially depends on capital and labour and has the following formula:
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