The Relationship Between Information & Communication Technology and Foreign Direct Investment Inflow to Africa

Abstract

This paper examined the relationship between the increasing Information & Communication Technology (ICT) infrastructure in Africa and foreign direct investment inflow to Africa using panel data sourced from ITU and WDI over 17 years (1998-2014). The paper applies both the fixed-effect and difference-in-differences models. The results indicate that there is a positive correlation between FDI inflow and ICT level in the host country.  The surge in ICT infrastructure in 2009 has substantially increased the FDI inflow to Africa. This increase in FDI inflow was more in the countries that have access to the sea than the countries that have no access to the sea. In other words, the average scale change in FDI inflow to the countries with no access to the sea is smaller than the countries with the coastline.