Socio-Economic Impact of Foreign Direct Investment in Developing Countries

The purpose of this chapter is to empirically examine the impact of socio-economic determinate of foreign direct investment in developing economies. FDI is an important part of the massive private investment that is driving economic growth around the world, particularly in the past two decades. This was achieved by examining 10 African countries using data from world development indicators on FDI and socio-economic parameters ranging from 1990 to 2015. A panel regression model was applied to 260 samples. The results showed openness, exchange rate, domestic credit to private sector, and regulatory quality have a significant effect on FDI. Policy makers in African countries need to adopt institutional reforms that could contribute to improving their state of governance, promote their investment climate, and help in attracting more FDI.