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Title: IMPACT OF FOREIGN DIRECT INVESTMENT ON ECONOMIC GROWTH IN MALI (1985-2015)
Authors: Dr Cheick Oumar CAMARA
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Dr Cheick Oumar CAMARA Institut Superieur des Techniques Economiques comptables et commerciales du Mali (INTEC SUP)
MLA 8 CAMARA, Dr Cheick Oumar. "IMPACT OF FOREIGN DIRECT INVESTMENT ON ECONOMIC GROWTH IN MALI (1985-2015)." Int. j. of Social Science and Economic Research, vol. 9, no. 1, Jan. 2024, pp. 4
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ABSTRACT: Different researchers have different views on the exact contribution of foreign direct investment in the discourse on economic growth in several developing countries. Supporters believe that Foreign Direct Investment increases domestic capital and improves productivity and growth by filling economies; foreign currency; performance and management gaps, cross-border credit and risk swaps, technology and skills transfer, job creation. Opponents also believe that Foreign Direct Investment exposes domestic markets to external volatility, the increase in dependence and the transformation of domestic savings can bring macroeconomic stability. The Government of Mali attaches great importance to the contribution of Foreign Direct Investment to economic growth, as evidenced by the many deliberate actions taken to exploit Foreign Direct Investment flows into the economy, including legislation and trade incentives. However, previous studies of the real contribution of FDI to economic growth or the conditions under which FDI stimulates economic growth have produced mixed results. Given the level of importance attributed to FDI related to economic growth in Mali, this study investigates the effect of foreign direct investment on the growth of the Malian economy using data on FDI inflows and GDP from 1985 to 2015. In order to achieve our main objective, we have developed the function Cobb Douglass production and regression of ordinary least squares. In the regression calculations we had to use such as gross domestic product (GDP) is represented as the dependent variable while foreign direct investment (FDI), public expenditure (GE), and human capital (HC) are the independent variables, to evaluate the impact of FDI on economic growth in Mali. The results show that when FDI inflow increase by 1% ,that will increase GDP by 0.061%, all things being equivalent, however it is statistically very significant at 5% of 0.000%, this means that when the government of Mali attracts more investors that will likely increase economic growth. The main conclusion is that 0.061% of the evolution of the economic growth in Mali during the period is due of the foreign direct investments. In itself, FDI is significant to influence economic growth in Mali, but must interact with infrastructure development and the openness of the economy to produce the desired impact on economic growth. Therefore, for the economy to achieve its medium- and long-term goals, whose success depends on FDI inflows, these conditions must be exploited or explored.

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