Foreign direct investment to African countries of the zone Franc CFA after the period of devaluation: An economic and political approach

In this dissertation, the author examined economic and political factors and their impact on the amount of foreign direct investment (FDI) that flow to African Countries of the Franc Zone following the period of devaluation in 1994.;It is hypothesized that population, real gross domestic product (GDP), GDP growth rate, trade openness, privatization, government expenditure on education, health facilities, industries, public order and safety, fuel and energy, and political capacity are all positively related and significant at the 0.05 level with the amount of FDI. It is also hypothesized that political instability and the inflation rate are negatively related and significant at the 0.05 level with the amount of FDI that flow into African Countries of the Franc Zone following the period of devaluation.;Unlike previous studies, which used both cross-country, time-series and case study analysis, this study uses a group of fourteen countries that experienced devaluation within the time frame 1994--2002. In addition to variables used in previous studies such as privatization, political instability, population, real GDP growth rate, real GDP, government expenditure on education, industries, and subsidies are reexamined, new variables such as government expenditure on public order and safety, government expenditure on fuel and energy as well as government expenditure on public health facilities are added and examined.;The analysis from this study indicated that privatization, population or market size, political capacity, trade openness, real GDP, government spending in education, government spending on health facilities are major catalyst that help boost the amount of FDI. The findings also supported the hypothesis that political instability has a negative impact on the amount of FDI. Some variable such as the inflation rate, government subsidies, real GDP growth rate, and government spending on public order and safety showed no significant relations with the amount of FDI that flow to African countries of the Franc Zone following the period of devaluation. The presence of multi-collinearity in the hypothesis was solved by dropping the variables with a higher degree of multi-collinearity.