Impacts of inward FDIs and ICT penetration on the industrialisation of Sub-Saharan African countries

Abstract

This paper examines the impact of inward foreign direct investments (FDIs) on the industrialisation process in Sub-Saharan African (SSA) countries. Furthermore, the underlying analysis is investigated under consideration of the impact of information and communication technology (ICT) penetration. The paper uses a data sample from 47 countries from 1996 to 2017. Results indicate that FDIs negatively affect SSA countries’ industrialisation process and that this relationship is compounded by a high degree of ICT penetration. Additional findings show that the GDP and the degree of industrialisation have a U-shaped relationship and that exports as well as domestic investment hamper the industrialisation process of SSA countries. The findings indicate that policymakers should critically analyse inward FDIs and the conditions necessary to achieve their beneficial effects.