Foreign Direct Investment and Spillover Effects in Africa: An Empirical Review

Abstract

The purpose of this paper is to holistically present relevant empirical findings on FDI, economic growth and spillover effects in the African continent, focusing primarily on technology transfer. This review shows evidence to suggest the FDI coming into Africa is low compared to other continents, even though foreign investments have consistently yielded higher returns. The paper also presents stylized facts of FDI inflows and examines the strands in literature. A unique graphical framework showing technology transfer channels is well elaborated. The study provides a sufficient empirical view of FDI and technology transfer in the African context and suggests this transfer of technology could be the means of bridging the technology gap between developed and developing economies.

Keywords: Foreign Direct Investment, Stylized Facts, Technology Spillover

JEL Classification: F21, O11, O33