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Title
Re-examining Bhagwati hypothesis: the case of some selected countries in Sub-Saharan Africa
Author(s)
Publication Date
2021
Early Online Version
Abstract
<p>Bhagwati hypothesis opines that the overall impact of foreign direct investment (FDI) on economic growth is conditioned on countries' level of integration with the international market. We test this hypothesis for some selected countries in sub-Saharan Africa (SSA). Does this hypothesis hold given our sample evidence? Yes! No! Maybe! We explain why. By invoking the sample splitting and threshold estimation technique, we find that the two measures of openness (trade openness and exports) mediate the FDI-economic growth relationship in three countries and this is an indication of complete Bhagwati hypothesis in these countries. Also, we find that, given the measure of openness, four countries exhibit incomplete Bhagwati hypothesis. Finally, we find no support for the Bhagwati hypothesis for most countries. Based on these findings, we argue that the validity of the Bhagwati hypothesis may be contingent on both country characteristics and the indicator of openness.</p>
Publication Type
Journal Article
Source of Publication
Transnational Corporations Review, 13(3), p. 334-345
Publisher
Routledge
Socio-Economic Objective (SEO) 2020
2021-01-22
Place of Publication
United States of America
ISSN
1925-2099
1918-6444
Fields of Research (FoR) 2020
Socio-Economic Objective (SEO) 2020
Peer Reviewed
Yes
HERDC Category Description
Peer Reviewed
Yes
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