Foreign Direct Investment an Engine for Development: Factors Determining Its Inflow to the Sudan

Emmanuel Pitia Zacharia Lado

doi:doi:10.11648/j.eco.20150405.12

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Foreign Direct Investment an Engine for Development: Factors Determining Its Inflow to the Sudan

Emmanuel Pitia Zacharia Lado

Published in Economics (Volume 4, Issue 5)

Received: 19 August 2015 Accepted: 1 September 2015 Published: 14 September 2015

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Abstract

The study was carried out to establish the possible factors that determine the inflow of Foreign Direct Investment into the Sudan. Using OLS and annual time series data for the period 1980 to 2011, the study established that variables that determine inflow of FDI both in the long-run and short-run for the Sudan are the market size and the level of development. While infrastructure development and financial sector development have been the determining factors for the FDI flow to the country in the long-run, they do not posses any effect on the FDI flow into the country in the short-run. Additionally, inflation as a proxy for macroeconomic instability and openness of the economy to the out side world have been effective in determining the inflow of the FDI to the Sudan in the short-run but do not have any impact on the FDI flow to the country in the long run. The ECM term in the short-run dynamics shows that FDI was above its equilibrium value and has been moving downwards towards its equilibrium value, however, with low speed of adjustment towards its equilibrium value. As much as the study succeeded in attaining its objectives, the study suffers from lack of data for some variables and this has reduced the findings of the study. Additionally, with the break away of southern part of the country (now South Sudan), coupled with the civil war in the country, Sudan is likely to lose out foreign investors.

Published in	Economics (Volume 4, Issue 5)
DOI	10.11648/j.eco.20150405.12
Page(s)	81-89
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2015. Published by Science Publishing Group

Keywords

FDI, Sudan, Determinants, Unit Root, ECM

References

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APA Style

Emmanuel Pitia Zacharia Lado. (2015). Foreign Direct Investment an Engine for Development: Factors Determining Its Inflow to the Sudan. Economics, 4(5), 81-89. https://doi.org/10.11648/j.eco.20150405.12

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Emmanuel Pitia Zacharia Lado. Foreign Direct Investment an Engine for Development: Factors Determining Its Inflow to the Sudan. Economics. 2015, 4(5), 81-89. doi: 10.11648/j.eco.20150405.12

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AMA Style

Emmanuel Pitia Zacharia Lado. Foreign Direct Investment an Engine for Development: Factors Determining Its Inflow to the Sudan. Economics. 2015;4(5):81-89. doi: 10.11648/j.eco.20150405.12

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@article{10.11648/j.eco.20150405.12,
  author = {Emmanuel Pitia Zacharia Lado},
  title = {Foreign Direct Investment an Engine for Development: Factors Determining Its Inflow to the Sudan},
  journal = {Economics},
  volume = {4},
  number = {5},
  pages = {81-89},
  doi = {10.11648/j.eco.20150405.12},
  url = {https://doi.org/10.11648/j.eco.20150405.12},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.eco.20150405.12},
  abstract = {The study was carried out to establish the possible factors that determine the inflow of Foreign Direct Investment into the Sudan. Using OLS and annual time series data for the period 1980 to 2011, the study established that variables that determine inflow of FDI both in the long-run and short-run for the Sudan are the market size and the level of development. While infrastructure development and financial sector development have been the determining factors for the FDI flow to the country in the long-run, they do not posses any effect on the FDI flow into the country in the short-run. Additionally, inflation as a proxy for macroeconomic instability and openness of the economy to the out side world have been effective in determining the inflow of the FDI to the Sudan in the short-run but do not have any impact on the FDI flow to the country in the long run. The ECM term in the short-run dynamics shows that FDI was above its equilibrium value and has been moving downwards towards its equilibrium value, however, with low speed of adjustment towards its equilibrium value. As much as the study succeeded in attaining its objectives, the study suffers from lack of data for some variables and this has reduced the findings of the study. Additionally, with the break away of southern part of the country (now South Sudan), coupled with the civil war in the country, Sudan is likely to lose out foreign investors.},
 year = {2015}
}

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TY  - JOUR
T1  - Foreign Direct Investment an Engine for Development: Factors Determining Its Inflow to the Sudan
AU  - Emmanuel Pitia Zacharia Lado
Y1  - 2015/09/14
PY  - 2015
N1  - https://doi.org/10.11648/j.eco.20150405.12
DO  - 10.11648/j.eco.20150405.12
T2  - Economics
JF  - Economics
JO  - Economics
SP  - 81
EP  - 89
PB  - Science Publishing Group
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UR  - https://doi.org/10.11648/j.eco.20150405.12
AB  - The study was carried out to establish the possible factors that determine the inflow of Foreign Direct Investment into the Sudan. Using OLS and annual time series data for the period 1980 to 2011, the study established that variables that determine inflow of FDI both in the long-run and short-run for the Sudan are the market size and the level of development. While infrastructure development and financial sector development have been the determining factors for the FDI flow to the country in the long-run, they do not posses any effect on the FDI flow into the country in the short-run. Additionally, inflation as a proxy for macroeconomic instability and openness of the economy to the out side world have been effective in determining the inflow of the FDI to the Sudan in the short-run but do not have any impact on the FDI flow to the country in the long run. The ECM term in the short-run dynamics shows that FDI was above its equilibrium value and has been moving downwards towards its equilibrium value, however, with low speed of adjustment towards its equilibrium value. As much as the study succeeded in attaining its objectives, the study suffers from lack of data for some variables and this has reduced the findings of the study. Additionally, with the break away of southern part of the country (now South Sudan), coupled with the civil war in the country, Sudan is likely to lose out foreign investors.
VL  - 4
IS  - 5
ER  -

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Emmanuel Pitia Zacharia Lado

Department of Economics, CSES, University of Juba, Juba, South Sudan

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Emmanuel Pitia Zacharia Lado. (2015). Foreign Direct Investment an Engine for Development: Factors Determining Its Inflow to the Sudan. Economics, 4(5), 81-89. https://doi.org/10.11648/j.eco.20150405.12

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Emmanuel Pitia Zacharia Lado. Foreign Direct Investment an Engine for Development: Factors Determining Its Inflow to the Sudan. Economics. 2015, 4(5), 81-89. doi: 10.11648/j.eco.20150405.12

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AMA Style

Emmanuel Pitia Zacharia Lado. Foreign Direct Investment an Engine for Development: Factors Determining Its Inflow to the Sudan. Economics. 2015;4(5):81-89. doi: 10.11648/j.eco.20150405.12

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@article{10.11648/j.eco.20150405.12,
  author = {Emmanuel Pitia Zacharia Lado},
  title = {Foreign Direct Investment an Engine for Development: Factors Determining Its Inflow to the Sudan},
  journal = {Economics},
  volume = {4},
  number = {5},
  pages = {81-89},
  doi = {10.11648/j.eco.20150405.12},
  url = {https://doi.org/10.11648/j.eco.20150405.12},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.eco.20150405.12},
  abstract = {The study was carried out to establish the possible factors that determine the inflow of Foreign Direct Investment into the Sudan. Using OLS and annual time series data for the period 1980 to 2011, the study established that variables that determine inflow of FDI both in the long-run and short-run for the Sudan are the market size and the level of development. While infrastructure development and financial sector development have been the determining factors for the FDI flow to the country in the long-run, they do not posses any effect on the FDI flow into the country in the short-run. Additionally, inflation as a proxy for macroeconomic instability and openness of the economy to the out side world have been effective in determining the inflow of the FDI to the Sudan in the short-run but do not have any impact on the FDI flow to the country in the long run. The ECM term in the short-run dynamics shows that FDI was above its equilibrium value and has been moving downwards towards its equilibrium value, however, with low speed of adjustment towards its equilibrium value. As much as the study succeeded in attaining its objectives, the study suffers from lack of data for some variables and this has reduced the findings of the study. Additionally, with the break away of southern part of the country (now South Sudan), coupled with the civil war in the country, Sudan is likely to lose out foreign investors.},
 year = {2015}
}

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TY  - JOUR
T1  - Foreign Direct Investment an Engine for Development: Factors Determining Its Inflow to the Sudan
AU  - Emmanuel Pitia Zacharia Lado
Y1  - 2015/09/14
PY  - 2015
N1  - https://doi.org/10.11648/j.eco.20150405.12
DO  - 10.11648/j.eco.20150405.12
T2  - Economics
JF  - Economics
JO  - Economics
SP  - 81
EP  - 89
PB  - Science Publishing Group
SN  - 2376-6603
UR  - https://doi.org/10.11648/j.eco.20150405.12
AB  - The study was carried out to establish the possible factors that determine the inflow of Foreign Direct Investment into the Sudan. Using OLS and annual time series data for the period 1980 to 2011, the study established that variables that determine inflow of FDI both in the long-run and short-run for the Sudan are the market size and the level of development. While infrastructure development and financial sector development have been the determining factors for the FDI flow to the country in the long-run, they do not posses any effect on the FDI flow into the country in the short-run. Additionally, inflation as a proxy for macroeconomic instability and openness of the economy to the out side world have been effective in determining the inflow of the FDI to the Sudan in the short-run but do not have any impact on the FDI flow to the country in the long run. The ECM term in the short-run dynamics shows that FDI was above its equilibrium value and has been moving downwards towards its equilibrium value, however, with low speed of adjustment towards its equilibrium value. As much as the study succeeded in attaining its objectives, the study suffers from lack of data for some variables and this has reduced the findings of the study. Additionally, with the break away of southern part of the country (now South Sudan), coupled with the civil war in the country, Sudan is likely to lose out foreign investors.
VL  - 4
IS  - 5
ER  -

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