Characteristics of investment in sub-Saharan Africa

Drawing on the survey data, this chapter attempts to explain, insofar as descriptive analysis permits, differences between domestic and foreign firms from several perspectives, most importantly, performance. Firms’ differential performances are contrasted with a set of firm characteristics thought to possess explanatory power. This generates several key observations, some of which prove surprising. Whereas important patterns are discerned, the analysis is limited by the fact that some of the explanatory firm characteristics may be strongly correlated, meaning that two variables may explain largely the same firm performance. The solution is to delve into more advanced statistical analysis, which allows for multiple explanatory variables at the same time.

Related Subject(s): International Trade and Finance