Infrastructure Quality and FDI Inflows : Evidence from the Arrival of High-Speed Internet in Africa
Does ambient infrastructural quality affect foreign direct investment (FDI) in developing countries This paper investigates how the arrival of high-speed internet in Africa triggered FDI into the banking and technology services sectors. It also exp...
| Main Authors: | , |
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| Format: | Policy Research Working Paper |
| Language: | English |
| Published: |
Washington, DC: World Bank
2022
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/586221645627068449/Infrastructure-Quality-and-FDI-Inflows-Evidence-from-the-Arrival-of-High-Speed-Internet-in-Africa http://hdl.handle.net/10986/37056 |
| Summary: | Does ambient infrastructural quality
affect foreign direct investment (FDI) in developing
countries This paper investigates how the arrival of
high-speed internet in Africa triggered FDI into the banking
and technology services sectors. It also explores the role
of complementary infrastructure, such as access to reliable
electricity, in amplifying the impact of internet
connectivity on investment. The identification strategy
exploits plausibly exogenous variations in access to
high-speed internet induced by the staggered arrival of
submarine fiber-optic internet cables and the subsequent
rollout of terrestrial fiber cable networks across locations
on the continent. Findings from the paper show that access
to high-speed internet induces FDI into the banking and
technology sectors. However, the impact pertains mainly to
countries with access to reliable electricity, thus
highlighting the role of complementarities in the impact of infrastructure. |
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