Understanding FDI Determinants in Africa Using Big Data Approach

核心概念

Regional-level factors play a crucial role in determining foreign ownership in African companies.

摘要

The study proposes a novel methodology using text mining and social network analysis to analyze over 167,000 online news articles on FDI determinants in Africa. It highlights the importance of regional (sub-national) characteristics affecting FDI ownership. The findings suggest that structural and institutional attributes at the regional level significantly impact foreign ownership. The research fills a gap by exploring firm-level data to investigate FDI determinants in developing countries, focusing on obstacles beyond traditional factors like market size or infrastructure development.

統計資料

Findings suggest that regional (sub-national) characteristics play an important role in determining foreign ownership.
Over 167,000 online news articles were analyzed to quantify regional-level attributes affecting FDI ownership.
The study used text mining and social network analysis to assess primary challenges faced by companies in African nations hindering or promoting FDI inflows.

引述

"Findings suggest that regional (sub-national) structural and institutional characteristics can play an important role in determining foreign ownership."
"Our analysis extends information on obstacles to industrial development as mapped by the World Bank Enterprise Surveys."

從以下內容提煉的關鍵洞見

A Big Data Approach to Understand Sub-national Determinants of FDI in Africa

by A. Fronzetti... 於 arxiv.org 03-18-2024

https://arxiv.org/pdf/2403.10239.pdf

深入探究

How do regional-level factors influence FDI differently compared to country-level factors?

Regional-level factors can have a more nuanced and targeted impact on FDI compared to country-level factors. While country-level factors provide a broad overview of the investment climate, regional-level factors allow for a deeper understanding of the specific challenges and opportunities present in different areas within a country.

Diversity within Countries: Regions within a country can vary significantly in terms of infrastructure, workforce skills, regulatory environment, and access to resources. By analyzing these sub-national differences, policymakers can tailor their strategies to address specific needs and attract investments that align with the strengths of each region.

Local Context Consideration: Regional analysis allows for a more granular examination of local laws, regulations, cultural norms, and business practices that may impact foreign investment decisions. Understanding these nuances is crucial for creating targeted policies that support FDI inflows.

Resource Allocation: By focusing on regional determinants, policymakers can allocate resources more efficiently by prioritizing regions with high potential for attracting FDIs based on their unique characteristics and strengths.

Mitigating Risks: Identifying region-specific risks such as corruption levels or social disorder enables policymakers to implement measures tailored to address these challenges effectively at the local level.

In summary, while country-level factors provide an overall picture of the investment climate in a nation, regional-level analysis offers insights into localized conditions that can significantly influence FDI patterns within different areas of the same country.

What are the implications of the study's findings for policymakers aiming to attract more FDIs?

The study's findings have several implications for policymakers seeking to enhance FDI inflows:

Targeted Interventions: Policymakers should focus on addressing region-specific obstacles identified in the study such as corruption levels or taxation issues through targeted interventions aimed at improving institutional quality and reducing barriers faced by businesses operating in those regions.

Enhanced Investment Climate: By leveraging insights from news-based data analysis like SBS values related to justice systems or taxation topics discussed in media reports about various regions,...

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How can the methodology used in this research be applied to analyze FDI determinants in other regions globally?

The methodology employed in this research using text mining and social network analysis techniques could be adapted for analyzing FDI determinants in other regions globally:
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