Birte Pfeiffer / Holger Görg / Lucia Perez Villar

The Heterogeneity of FDI in Sub-Saharan Africa – How Do the Horizontal Productivity Effects of Emerging Investors Differ from Those of Traditional Players?

Kiel Working Papers 1981, 2015, 31 pp.

This paper analyzes the horizontal productivity effects of foreign direct investment (FDI) from industrialized and developing countries in 10 sub-Saharan African countries. We establish a unique data set by combining data from the World Bank Enterprise Surveys that allow us to distinguish between foreign investors from sub-Saharan Africa, Asia, Europe, the Middle East, and North Africa. We find strong evidence of horizontal productivity spillovers to domestic firms derived from foreign-firm presence. However, these effects are clearly dependent on domestic firms’ absorptive capacity. The largest productivity effects seem to be driven by investors from sub-Saharan Africa. Our analysis also shows that productivity effects differ according to the income level of host countries. Overall, the strongest productivity effects seem to materialize in lower-middle-income countries. These key findings emphasize the increasing importance of emerging investors, beyond the traditional players from industrialized countries, in sub-Saharan Africa.

GIGA Authors

Dr. Birte Pfeiffer (née Pohl)

Research Data Management
Research Fellow

Recent Publications by the Authors

Robert Kappel / Birte Pfeiffer / Helmut Reisen

Compact with Africa: fostering private long-term investment in Africa

German Development Institute / Deutsches Institut für Entwicklungspolitik (DIE). Discussion Paper, 2017, 13/2017

Robert Kappel / Helmut Reisen / Birte Pfeiffer

Compact with Africa: Fostering Private Long-Term Investment

T20 Blog, 2017

Lena Giesbert / Birte Pfeiffer / Simone Schotte

Economic Partnership Agreements with the EU: Trade-Offs for Africa

GIGA Focus Africa, 07/2016

Robert Kappel / Birte Pfeiffer / Helmut Reisen

Fluxos financeiros externos e receitas fiscais em África

in: African Development Bank, Organisation for Economic Co-operation and Development, United Nations Development Programme (ed.), Perspetivas económicas em África 2016: Cidades sustentáveis e transformação estrutura, Paris: OECD Publishing, 2016, 57-86

Robert Kappel / Birte Pfeiffer / Helmut Reisen

Apports financiers extérieurs et recettes fiscales en Afrique

in: African Development Bank, Organisation for Economic Co-operation and Development, United Nations Development Programme (ed.), Perspectives économiques en Afrique 2016: Villes durables et transformation structurelle, Paris: OECD Publishing, 2016, 57-85