Multidimensional Determinants of foreign Direct Investment in Central Africa: A Modified Gravity GMM Panel Approach

Abstract

This research's objective is to highlight the multidimensional determinants of FDI in Central Africa countries, especially in the
Economic and Monetary Community of Central Africa (EMCCA). To do this, a modified and adapted gravity model is
constructed and tested by the GMM method. The main result shows that natural resources are by far the most significant
determinant of FDI in the EMCCA. Market size (population and gross domestic product) may also play a role in attracting FDI
in addition to natural resources and infrastructure. However, we find that economic openness remains to be perfect to attract
foreign investors.