Interactive Impact of Armed Conflicts on Foreign Direct Investments in Africa

This study examined the interactive impact of armed conflicts on FDI flows into Africa. A dataset involving 41 African countries and a dynamic system GMM model were adopted. The findings showed that conflict had a significant negative effect on FDIs; and that infrastructural development significantly moderated the impact of conflicts. The study also revealed that the impact of conflict was higher for natural resource-rich countries than for non-resource-rich countries, and that the impact was both regional and seasonal sensitive. The findings suggest that rebuilding conflict-induced infrastructure destructions can play significant role in attracting FDIs even in conflict-prone countries of Africa.