Date of Award
Department of International Affairs and Development
T. Christopher Jespersen
Bernice de Cannes Scott
This study examines the social and economic effects of multinational corporations (MNCs), the main purveyors of foreign direct investment (EDI), on the countries of sub-Saharan Africa. The study is based on the rift in empirical and theoretical findings concerning the actual effects of multinational presence in a developing country. On one hand, those who believe in the efficiency of MNCs in bringing about global development have produced studies and theories to support their view of multinationals as the “great equalizers among nations.” On the other hand, those in disagreement with this view of the multinational have also produced studies and theories, which contend that the MNC has adverse effects on political and economic sovereignty and the fulfillment of basic needs in developing economies. A regression analysis was used to investigate the effects of foreign direct investment (EDI), foreign aid (ODA) and political stability (PS) on the economic growth and economic development of thirty sub-Saharan African countries during two time periods: 1980-1989 and 1990-1995. Foreign aid and political stability were also used in the study due to the fact that both have been known to affect the direction of growth and development. The time periods were chosen to analyze the effects of the end of the Cold War (1989) on sub-Saharan African countries. The researcher found that political stability had the most significant impact on economic growth in period 2 and economic development in both time periods. The conclusions drawn from the findings suggest that the small amount of foreign investment that sub-Saharan Africa receives probably accounts for its insignificant effects on economic growth and development. They also suggest that cormption concerning the misuse of foreign aid probably accounts for the insignificant effects that foreign aid had on economic growth and economic growth and development.
Mseka, Chikondi O., "The impact of foreign direct investment on the economic growth and development of sub-Saharan African countries" (1998). ETD Collection for AUC Robert W. Woodruff Library. 3685.