On the determinants of foreign direct investment to developing countries: Is Africa different?

This paper explores whether factors that affect Foreign Direct Investment (FDI) in developing countries affect countries in sub-Saharan Africa (SSA) differently. The results indicate that: (a) a higher return on investment and better infrastructure have a positive impact on FDI to non-SSA countries, but have no significant impact on FDI to SSA; (b) openness to trade promotes FDI to SSA and non-SSA countries; however, the marginal benefit from increased openness is less for SSA. These results imply that Africa is different-suggesting that policies that have been successful in other regions may not be equally successful in Africa. (C) 2001 Elsevier Science Ltd. All rights reserved.