国际经济与管理科学杂志

Economic Determinants of Foreign Direct Investment Inflow in Cameroon

Abstract

Sonkey Louis Ntu1*, and Miracle Lobe

Multinational Enterprises (MNEs) transfer capital, technological knowledge and management to the local corporations, it was projected that their existence in Cameroon would advance the trade, economic growth and industry situation of the country. This study was therefore aimed at investigating the Economic Determinants of Foreign Direct Investment (FDI) inflow in Cameroon. The work therefore embarked on answering the question “What are the Economic Determinants of Foreign Direct Investment (FDI) inflow in Cameroon?” In achieving this, the Ordinary Least Square (OLS) estimation technique was employed to estimate the coefficients of the variable in the model, with data from world bank development indicator. On the basis of the OLS results obtained from the FDI model, gross fix capital formation, gross domestic product, and household consumption positively affect the inflow of foreign direct investment in Cameroon and were all statistically significant. By implication, an increase in these variables, would lead to an increase in foreign direct investment inflow in Cameroon ceteris paribus. Though Inflation, Openness to Trade and Government Expenditure also had a positive relationship in attracting the inflow of FDI in Cameroon, their coefficients were not statistically significant. Meanwhile taxes had a statistically insignificant result and a negative relationship with FDI inflow in Cameroon. We therefore reject the null hypotheses that Economic factors has no significant effect in influencing the inflow of Foreign Direct Investment (FDI) in Cameroon. It is therefore recommended that by attracting FDI, Cameroon government should ensure to develop policies that favours the stimulation of the various macro indicators. That is, the government should strive to maintain a favourable and stable rate of inflation and trade so as to easily attract FDI in the economy and regulate her tax policy.