Derterminants of Foreign Direct Investment Inflows in Senegal

Derterminants of Foreign Direct Investment Inflows in Senegal

The success stories of India, South Korea, and China’s economic development highlight the benefits that a country can get by utilizing a strategy that attracts and gains value from FDI. While FDI inflows have been increasing in some developing countries, Africa has not been successful except in natural-resource exploitation. Given the importance of FDI to Africa, an important question that arises is: How can Senegal increase its global share of FDI? Developing countries are increasingly aware of the role of foreign direct investment (FDI) as an engine of growth in their economies. Foreign investor can contribute to growth by providing much needed capital and skills, by sharing risks in large projects and by serving as a vehicle for technology transfer. For many developing countries, FDI is a mechanism by which to promote industries in which they have a potential comparative advantage that cannot otherwise be exploited. The purpose of this study is therefore to find determinants of FDI inflows in Senegal. To achieve this purpose, we collected data of 30-year periods, 1980-2009, based on data availability. And then performed the multiple regressions with SPSS 17.0. We have found that market size and infrastructure have positive effect on FDI inflows in Senegal significantly. But openness has no significant effect on FDI inflows in Senegal.