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Foreign direct investment: Technology gap effects on international business capabilities of sub‐Saharan Africa
Author(s) -
Elmawazini Khaled,
Nwankwo Sonny
Publication year - 2012
Publication title -
thunderbird international business review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.553
H-Index - 37
eISSN - 1520-6874
pISSN - 1096-4762
DOI - 10.1002/tie.21476
Subject(s) - foreign direct investment , technology gap , order (exchange) , panel data , economics , investment (military) , international economics , business , international trade , macroeconomics , political science , politics , econometrics , finance , law
This article investigates the impact of foreign direct investment (FDI) on the technology gap between countries in sub‐Saharan Africa (SSA) and the Organisation for Economic Co‐operation and Development (OECD), against the backdrop of relatively weak industrial performance of SSA. OECD is used in order to measure how SSA's competitiveness compares with the more advanced economies. The article further examines how the technology gap, in turn, exacerbates international business capabilities of SSA and draws out some policy implications. Using a panel data regression model, the article finds that FDI inflows have had relatively little impact on SSA's industrial capacity development and global competitiveness, and, indeed, widened the gap between SSA and major developed economies. © 2012 Wiley Periodicals, Inc.