How IFRS influence the relationship between the types of FDI and economic growth An empirical analysis on African countries

Purpose The purpose of this paper is to examine the relationships between International Financial Reporting Standards (IFRS), types of foreign direct investment (FDI) - greenfield investments (GFIs) and mergers and acquisitions (M&As) - and economic growth in 49 African countries between 2003 and 2017. Design/methodology/approach In the study, panel data fixed effects and generalized method of moments estimation techniques are used in order to test the hypotheses. Findings Using country-level data obtained from the World Development Indicators, The United Nations Conference on Trade and Development and World Governance Indicators websites, the authors find that IFRS and the types of FDI are significantly related to economic growth. Moreover, our results provide evidence that the effect of GFIs and M&As on growth is influenced by IFRS positively. Originality/value The study provides important insights into the effects of types of FDI on the economic growth of African countries and into the role that IFRS play on this relationship.