Does Foreign Direct Investment Contribute to Poverty Reduction in Cameroon? An ARDL-Bounds Testing Approach

Stéphane Mbiankeu Nguea (1) , Issidor Noumba (2) , Armand Gilbert Noula (1)

1 Université de Dschang
2 Faculty of Economics and Management, University of Yaoundé II - Soa

This paper investigates the impact of Foreign Direct Investment (FDI) on poverty reduction in Cameroon from on the period 1984-2014. Auto Regressive Distributed Lags (ARDL) bounds test approach to co-integration has been applied to analyze the data coming from freedom house and World Development Indicators (WDI). Three poverty reduction proxies namely life expectancy, per capita household consumption expenditure and infant mortality rate are used to capture multidimensional feature of poverty and to increase the robustness of the results. The findings revealed that the impact of FDI to alleviate poverty is less significant in Cameroon as evidenced by one out of three (infant mortality) poverty reduction proxies where a short-run positive impact of FDI on poverty reduction is confirmed. These findings suggest that Cameroon may use FDI as a short-term poverty reduction instrument. JEL Classifications: F21, I30

Mots clés: Foreign direct investment; poverty reduction; co-integration; autoregressive distributed lag; Cameroon

Domaines: Economies et finances

Stéphane Mbiankeu Nguea, Issidor Noumba, Armand Gilbert Noula. Does Foreign Direct Investment Contribute to Poverty Reduction in Cameroon? An ARDL-Bounds Testing Approach. 2020. ⟨halshs-02570072⟩