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Does inward FDI crowd-out domestic investment? evidence from Uganda

Kasule, Twaha Ahmed and Ghani, Gairuzazmi and Mohamad, Noorihsan and Mat Derus, Alias (2015) Does inward FDI crowd-out domestic investment? evidence from Uganda. Procedia Social and Behavioral Sciences, 172. pp. 419-426. ISSN 1877-0428

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This paper investigates whether Foreign Direct Investment (FDI) crowds-out domestic investment in Uganda. We analyse the effect on the aggregate economy and at sectoral level using data from 1992 to 2012. We obtain a robust neutral effect on the overall economy. At sector level, we find a crowding-out effect in four sectors; a crowding-in effect in two sectors and a neutral effect in three sectors. But generally, results are robust in only six sectors. Finally, an exogeneity test reveals that past economic growth rates do not influence the inflow of FDI, hence there is no endogeneity problem in our analysis.

Item Type: Article (Journal)
Additional Information: 2565/42462
Uncontrolled Keywords: Crowding-out effect; displacement effect; foreign direct investment; sectoral level; Uganda.
Subjects: H Social Sciences > HB Economic Theory > HB3711 Business cycles. Economic fluctuations
H Social Sciences > HC Economic History and Conditions > HC94 By region or country
H Social Sciences > HD Industries. Land use. Labor > HD72 Economic growth, development, planning
Kulliyyahs/Centres/Divisions/Institutes (Can select more than one option. Press CONTROL button): Kulliyyah of Economics and Management Sciences > Department of Economics
Depositing User: Dr. Noorihsan Mohamad
Date Deposited: 23 Apr 2015 10:29
Last Modified: 23 Apr 2015 10:29
URI: http://irep.iium.edu.my/id/eprint/42462

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