Abstract
Dynamics in business regulations measured by ease of doing business is a new approach that indicates countries’ business climate reforms toward suitability for investment growth. The present study took three variables from the ease of doing business data and evaluated them toward predictive power of FDI flow to 19 Sub-Saharan African countries by using fixed-effect model. Based on the analysis, the official time, procedures, costs, and minimum capitals in starting a business stage, enterprise registrations and official permissions of the firm establishment had a material effect on investment growth. Even though, on one side trade openness and the growing market size was seen as an opportunity, the deep-rooted corruption and landlocked was the trap for the smooth growth of firms in the region.
Highlights
Attentions toward encouraging Multinational enterprises advancement across home and host economies are becoming the largest sources of economic stability and new technologies for countries in reference [1,2]
The ease of doing business is an aggregate amount constructed from different parameters determining the degree of business regulations in countries
Model 1 presented the associations of inward FDI and ease of starting a business score, official times, official costs, official procedures, and minimum capital required in starting a business stage
Summary
Attentions toward encouraging Multinational enterprises advancement across home and host economies are becoming the largest sources of economic stability and new technologies for countries in reference [1,2]. Several spill-over effects follow the expansions of these MNEs’ progress in the recent economic era, there are several obstacles besides their growth and expansions Most of these factors were classical, country-specific and some are emerging along with firms’ expansions. The fragmented business regulations in the continent had brought to a low global share of FDI In another dimension, the regional market size, trade openness, and landlocked countries were other sources of obstacles that challenged firms’. Reference [17] argued that policy issuers need to be conscious and reemphasize corruptions eliminations against countries’ resources In another view [18] findings indicated that efficient business regulations have a material effect on encouraging FDI flow across borders.
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