A Study On The Determinant Of Foreign Direct Investment In Southern Africa Region

The objective of this paper is to study the determinants of FDI in the Southern Africa Regions.The study covered 10 countries over the period of 14 years between 2004 and 2017 using the panel data estimation technique and employed Fixed Effect model for regression results after using Hausman Specification Test to choose between Fixed and Random Effect.The study use theory based on the Eclectic Paradigm Theory,ResourceBased Theory and Institution Based Theory and further review different empirical results of the previous study on the same topic.The regression results find that corruption is negative but statistically significant at 5% level.Trade openness and market size are positive and exert a significant impact on FDI.Natural resources and infrastructure tested negative and insignificant.That concluded that FDI inflow to Southern Africa is attracted by institutional factors,trade openness,and market size but not natural resources and infrastructure.The following policies were recommended in order to improve the inflow of FDI to this region: a)authority must put more effort in the fight against corruption so as to reduce corruption and improve the institutional quality,b)implementation of a policy that provides foreign investors with a favorable environment.