The effect of information and communication technologies on foreign direct investments attractiveness in africa

This article empirically assesses if Information and Communication Technologies (ICTs) diffusion enhances Foreign Direct Investments (FDI) attractiveness in a sample of 52 African countries from 2000 to 2015. We measure ICTs by fixed phone, mobile phone and internet services. Our Regressions are based on Pooled Ordinary Least Squares (POLS), Fixed Effect and Random Effect models and on system Generalized Method of Moments (system-GMM) for the robustness checks. The results obtained suggest that the diffusion of ICTs positively and significantly affects FDI attractiveness in Africa. In fact, the results show that the penetration of mobile phone and internet services have a positive and significant effect of FDI attractiveness, while fixed phone do not have a significant effect on external capitals inflow. In addition, Central, Southern and North Africa are the three African sub-regions where the effect of ICTs on FDI attractiveness is more relevant. Therefore, African countries should invest more in telecommunication infrastructure in order to take advantage of the potential of ICTs for FDI attractiveness.