Impact of Foreign Direct Investment (FDI) on Economic Growth in Congo
DOI:
https://doi.org/10.47672/jde.1873Keywords:
Foreign, Direct Investment (FDI), Economic GrowthAbstract
Purpose: The aim of the study was to assess the impact of foreign direct investment (FDI) on economic growth in Congo.
Methodology: This study adopted a desk methodology. A desk study research design is commonly known as secondary data collection. This is basically collecting data from existing resources preferably because of its low cost advantage as compared to a field research. Our current study looked into already published studies and reports as the data was easily accessed through online journals and libraries.
Findings: Foreign Direct Investment (FDI) has been widely studied for its impact on economic growth, with research suggesting both positive and nuanced effects. On one hand, FDI inflows can stimulate economic growth by providing access to capital, technology, and managerial expertise, which may enhance productivity and efficiency in the host country's industries. Additionally, FDI often fosters job creation and facilitates knowledge transfer, contributing to human capital development and skill enhancement within the workforce. Moreover, it can promote competition and innovation, driving overall economic dynamism. However, the relationship between FDI and economic growth is contingent upon various factors such as the quality of institutions, regulatory environment, infrastructure, and host country policies. Weak institutional frameworks or inadequate infrastructure may hinder the full realization of FDI benefits. Additionally, there are concerns about the potential for FDI to exacerbate income inequality and exploit natural resources, especially in developing countries. Thus, while FDI generally presents opportunities for economic growth, its impact is multifaceted and context-dependent, requiring careful consideration of host country conditions and policy frameworks.
Implications to Theory, Practice and Policy: Dependency theory, neoclassical growth theory and institutional theory may be use to anchor future studies on assessing the impact of foreign direct investment (FDI) on economic growth in Congo. Enhance investment promotion efforts to attract quality FDI inflows that align with the development objectives of host countries. Develop targeted industrial policies that encourage FDI inflows into strategic sectors with the potential to catalyze economic diversification and structural transformation
Downloads
References
Adeniran, A. T., & Ogunniyi, M. B. (2019). An Assessment of the Impact of Oil Price Fluctuation on Economic Growth in Nigeria. Journal of Economics and Sustainable Development, 10(3), 11-21.
Adeniran, A. T., & Ogunniyi, M. B. (2019). An Assessment of the Impact of Oil Price Fluctuation on Economic Growth in Nigeria. Journal of Economics and Sustainable Development, 10(3), 11-21.
Aldan, A., & Chen, Y. (2017). Population Aging, Economic Growth, and the Social Security Reform in Japan. The Japanese Economic Review, 68(2), 248-262. DOI: 10.1111/jere.12109
Alfaro, L., Chanda, A., Kalemli-Ozcan, S., & Sayek, S. (2017). FDI and productivity: A closer look at the role of financial development. Journal of International Economics, 112, 61-77.
Alfaro, L., Chanda, A., Kalemli-Ozcan, S., & Sayek, S. (2019). FDI and Economic Growth: The Role of Local Financial Markets. Journal of International Economics, 79(2), 229-242.
Ali, F., & Nieuwoudt, L. (2017). An Evaluation of the Contribution of Human Capital to Economic Growth in South Africa. Journal of Economics and Behavioral Studies, 9(3), 190-198.
Ali, F., & Nieuwoudt, L. (2017). An Evaluation of the Contribution of Human Capital to Economic Growth in South Africa. Journal of Economics and Behavioral Studies, 9(3), 190-198.
Asiedu, E. (2019). The effect of foreign aid and FDI on economic growth: evidence from sub-Saharan Africa. The Journal of Developing Areas, 53(4), 1-18.
Asiedu, E. (2020). Foreign Direct Investment and Economic Growth in Africa: The Role of Natural Resources. Journal of African Development, 22(1), 39-53.
Baldwin, R., & Di Mauro, B. W. (Eds.). (2015). Economic Policy Reforms 2015: Going for Growth. OECD Publishing.
Bhattacharyya, R., & Manasan, R. G. (2018). Understanding Growth and Inclusion in India. Springer.
Blomström, M., & Kokko, A. (2018). The economics of foreign direct investment incentives. In Foreign Direct Investment in Developing Countries (pp. 37-68). Routledge.
Borensztein, E., De Gregorio, J., & Lee, J. W. (2018). How does foreign direct investment affect economic growth? Journal of International Economics, 45(1), 115-135.
Borensztein, E., De Gregorio, J., & Lee, J. W. (2018). How Does Foreign Direct Investment Affect Economic Growth? Journal of International Economics, 45(1), 115-135.
Durusu-Ciftci, D., & Goktas, O. (2016). The impact of FDI on economic growth: An empirical analysis on Turkey. Procedia Economics and Finance, 38, 463-472.
Fernandes, R., & Tang, H. (2021). Strategic Foreign Direct Investment and Economic Growth. Economic Inquiry, 59(1), 465-483.
Firman, T., & Bunnell, T. (2019). The Complexities of Indonesia's Urban Transformation. Asian Geographer, 36(1), 1-20. DOI: 10.1080/10225706.2018.1552505
Gomide, A. T., & Neri, M. C. (2016). Economic Performance and Fiscal Prudence: Brazil's Economic Plan and the Provisional Contribution of Taxes to the Fund of Social Integration. Brazilian Journal of Political Economy, 36(4), 741-764. DOI: 10.1590/0101-31572016v36n04a08
Hu, A. G. Z. (2017). China's Economic Growth: Global Implications. Journal of Economic Perspectives, 31(1), 103-124. DOI: 10.1257/jep.31.1.103
IMF. (2020). Regional Economic Outlook: Middle East and Central Asia. Retrieved from https://www.imf.org/en/Publications/REO/MECA/Issues/2020/10/19/regional-economic-outlook-middle-east-central-asia-october-2020
Kuncoro, A. (2016). Indonesia's Economic Growth: Resources, Challenges, and Strategies. Bulletin of Indonesian Economic Studies, 52(2), 139-162. DOI: 10.1080/00074918.2016.1203546
Li, X., & Liu, X. (2016). FDI spillovers and industrial upgrading in China. World Economy, 39(10), 1444-1465.
Li, Y., & Lu, J. (2020). Mergers and Acquisitions, Foreign Direct Investment, and Economic Growth: Empirical Evidence from Asia-Pacific Region. International Journal of Finance & Economics, 25(3), 435-452.
Luo, S., & Ren, B. (2019). Foreign Direct Investment, Portfolio Investment, and Economic Growth: Evidence from China. International Review of Economics & Finance, 64, 237-248.
Sharma, S., & Mavalankar, S. K. (2017). FDI and economic growth in India: A sectoral analysis. Margin: The Journal of Applied Economic Research, 11(1), 1-21.
World Bank. (2020). World Development Indicators 2020. Retrieved from https://databank.worldbank.org/source/world-development-indicators
Zhang, J., & Wan, G. (2018). The Economic Growth of China: An Investment View. Springer.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2024 Prof. B. Husain
This work is licensed under a Creative Commons Attribution 4.0 International License.
Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution (CC-BY) 4.0 License that allows others to share the work with an acknowledgment of the work's authorship and initial publication in this journal.
