Africa’s economic fundamentals remain strong, but governments and companies will need to work even harder to keep the region’s economies moving forward. Many observers are questioning whether Africa’s economic advances are running out of steam. Five years ago, growth was accelerating in almost all of the region’s 30 largest economies, but the recent picture has been more mixed: while growth has sped up in about half of Africa’s economies, it has slowed in the rest.
According to the conservative view, capital flows enhance economic growth. Focussing on Afri-
ca’s real economy, this study investigates the linkage between portfolio investments and real sector growth, and whether financial sector development strengthens this association. The study
covers 30 countries over the period 1990–2017.
This study investigates the effect of pension funds (PF) and institutional quality (IQ) on capital market development in 48 African countries. Using a system GMM regression, the study found that the interaction between PF and IQ significantly negatively affects capital market development. The results of the study suggest that PF in Africa contributes positively to overall financial development, and pension fund managers (PFM) seem to be focusing more on other financial market assets than capital markets.
In light of the upsurge in Chinese investments in Africa since Deng’s ‘‘Go Global’’ policy, we study whether the location choices of greenfield investors in Africa differ between Chinese and non-Chinese firms. We focus on risk- and information-related factors, i.e., investment protection provided by investment agreements and country-of-origin, industry, and internal agglomeration. We argue that Chinese firms enjoy ownership advantages that reduce their concern for risk. Our results show that Chinese firms are less sensitive to risk-mitigating factors compared to firms from advanced and other emerging economies