Determinants of foreign direct investment in Sudan: an econometric perspective

Determinants of foreign direct investment in Sudan: an econometric perspective

Author: 
Ibrahim, Omer Ali
Publisher: 
Taylor & Francis
Date published: 
2013
Record type: 
Responsibility: 
Hassan, Hisham Mohamed, jt. author
Journal Title: 
The Journal of North African Studies
Source: 
The Journal of North African Studies, Vol. 18, No. 1, January 2013, pp. 1-15
Abstract: 

The paper explores the determinants of foreign direct investment (FDI) in Sudan over the period (1970–2010). The study considers the market size, inflation rate, exchange rate, indirect taxes, trade openness, and investment incentive policy as factors influencing FDI. The study uses the cointegration and error-correction techniques to identify the short- and long-run dynamics of the FDI determinants. The Johansen cointegration test statistics indentify four cointegrating relations among the series, which implies an existence of long-run relationship among the FDI determinants. The results of the long-run FDI equation indicate that FDI flows in Sudan are influenced by the market size, inflation rate, exchange rate, and investment incentive policy. The error-correction term suggests that approximately 17% of total disequilibrium in FDI flows was being corrected each year. Moreover, Granger causality results show that there is a unidirectional causality running from each of the exchange rate, investment incentive policy, and the market size to FDI.

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Country focus: 

CITATION: Ibrahim, Omer Ali. Determinants of foreign direct investment in Sudan: an econometric perspective . : Taylor & Francis , 2013. The Journal of North African Studies, Vol. 18, No. 1, January 2013, pp. 1-15 - Available at: https://library.au.int/determinants-foreign-direct-investment-sudan-econometric-perspective-4