Academy of Strategic Management Journal (Print ISSN: 1544-1458; Online ISSN: 1939-6104)

Abstract

The Role of Mobile Phone Penetration on Foreign Direct Investment Inflow: Evidence of Sub-Saharan Africa

Author(s): OLOKOYO Felicia Omowunmi, OMOZOKPIA Davidson

This study assesses the enhancing effect of mobile phone penetration on Foreign Direct Investment (FDI) for a panel dataset of all the 48 Sub-Saharan African countries, which is extracted from World Bank database between 2000-2018. This study adopts three distinct regression techniques such as Ordinary Least Square (OLS), Fixed Effect Regression (FE) and Generalized Moment of Method (GMM). Ordinary Least Square and Fixed Effect Regression tends to be biased and inconsistent. The results are defined as follows: (i) the coefficient estimates of the mobile phone penetration on FDI are positive and statistically significant; (ii) the net effect of mobile penetration remains positive on the FDI. The paper recommends that considering the low investment in the technology infrastructure and resultant benefits of the infrastructure in Sub-Saharan Africa, the governments in the region should make substantial investment in the localized technology, which in turn will encourage the foreign direct investment inflows into the region.

Get the App