Do Sub-Saharan African Cities With Lower Labour Cost Attract Greater FDI Inflow?

Autor:	Addisu A. Lashitew, Ronald Wall
Rok vydání:	2018
Předmět:	Economies of agglomeration Capital (economics) media_common.quotation_subject Economics Wage Developing country Omitted-variable bias Demographic economics Foreign direct investment Productivity Comparative advantage media_common
Zdroj:	SSRN Electronic Journal.
ISSN:	1556-5068
DOI:	10.2139/ssrn.3231606
Popis:	Developing countries are expected to have a comparative advantage in labour intensive manufacturing activities, and thus attract significantly higher FDI inflows. This chapter investigates the extent to which labour costs affect FDI inflow to Sub-Saharan African cities. The use of city level rather than national FDI inflow reduces problems of omitted variable bias and allows for better econometric identification. Our analysis reveals that cities with relatively lower wage rates do not attract greater FDI inflows after controlling for productivity differences. Capital cities have significantly higher FDI inflows after controlling for differences in wage rates and productivity. The results suggest that agglomeration forces associated with city size in Sub-Saharan Africa are more important determinants of FDI inflows than differences in wage rates.
Databáze:	OpenAIRE
Externí odkaz:	https://explore.openaire.eu/search/publication?articleId=doi_________::8655c68e47a6d7487d8a0d3a394e8061 https://doi.org/10.2139/ssrn.3231606 Zobrazit plný text záznamu