preprint · Research Square (Research Square)
Abstract The objective of this paper is to demonstrate how extractive FDI flows affect institutional quality in sub-Saharan Africa. We used a panel VAR model to estimate data from the World Bank's WDI and WGI databases between 1996 and 2021. Our analysis of the robustness of our results using impulse response functions based on Monte Carlo simulations revealed that FDI flows from the extractive industries have a negative and significant impact on the quality of institutions in sub-Saharan Africa. Therefore, it is crucial for the authorities in these countries to establish robust and trustworthy institutions that can effectively oversee FDI inflows into sub-Saharan African economies.
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DOI: 10.21203/rs.3.rs-3850285/v1
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