<abstract xmlns="http://www.w3.org/1999/xhtml">

<p>This study empirically examined the role of the country’s absorptive capacity on the impact of domestic investment on economic growth in the selected five African countries over the study period of 1970 to 2019. In specific, the study examined the impact of domestic investment on economic growth from two models, without the country’s absorptive capacity and with the country’s absorptive capacity. Further, a robust linear ordinary least squares (OLS) methodology including static panel OLS and panel cointegration estimators was employed. The study found that only changes in financial development and infrastructures positively cause changes in the domestic investment-economic growth nexus in the short run while in the long run, trade openness enhances the positive impact of domestic investment on economic growth in African countries. In addition, the study found that domestic investment retards economic growth without the country’s absorptive capacity in the short run and long run respectively in African countries. Therefore, the study recommended that policymakers should invest heavily in infrastructure and financial development systems as well as encourages trade openness for a stable domestic investment-economic growth nexus in African countries.</p>
</abstract>

This study empirically examined the role of the country’s absorptive capacity on the impact of domestic investment on economic growth in the selected five African countries over the study period of 1970 to 2019. In specific, the study examined the impact of domestic investment on economic growth from two models, without the country’s absorptive capacity and with the country’s absorptive capacity. Further, a robust linear ordinary least squares (OLS) methodology including static panel OLS and panel cointegration estimators was employed. The study found that only changes in financial development and infrastructures positively cause changes in the domestic investment-economic growth nexus in the short run while in the long run, trade openness enhances the positive impact of domestic investment on economic growth in African countries. In addition, the study found that domestic investment retards economic growth without the country’s absorptive capacity in the short run and long run respectively in African countries. Therefore, the study recommended that policymakers should invest heavily in infrastructure and financial development systems as well as encourages trade openness for a stable domestic investment-economic growth nexus in African countries.

Domestic Investment and Economic Growth Nexus: Does Absorptive Capacity Matter in The African Countries?

Department of Economics, Faculty of Social Sciences

Studia Universitatis „Vasile Goldis” Arad – Economics Series

This work is licensed under the Creative Commons Attribution 4.0 International License.

This study empirically examined the role of the country’s absorptive capacity on the impact of domestic investment on economic growth in the selected five...

Domestic Investment and Economic Growth Nexus: Does Absorptive Capacity Matter in The African Countries?

Pubblicato online: 06 ott 2023

Pagine: 45 - 69

Ricevuto: 01 ago 2022

Accettato: 01 dic 2022

DOI: https://doi.org/10.2478/sues-2023-0018

Parole chiave
Domestic Investment, Economic growth, Absorptive Capacity, Static Panel OLS, Panel Cointegration OLS, African Countries

© 2023 Oluwatosin Olatunji Ogunyomi-Oluyomi et al., published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.

Domestic Investment and Economic Growth Nexus: Does Absorptive Capacity Matter in The African Countries?

Pubblicato online: 06 ott 2023

Pagine: 45 - 69

Ricevuto: 01 ago 2022

Accettato: 01 dic 2022

DOI: https://doi.org/10.2478/sues-2023-0018

Parole chiaveDomestic Investment, Economic growth, Absorptive Capacity, Static Panel OLS, Panel Cointegration OLS, African Countries

© 2023 Oluwatosin Olatunji Ogunyomi-Oluyomi et al., published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.

Parole chiave
Domestic Investment, Economic growth, Absorptive Capacity, Static Panel OLS, Panel Cointegration OLS, African Countries