TITLE:
Effects of Forest Resources on the Reception of Foreign Direct Investment in Congo Basin Countries
AUTHORS:
Julien Ghislain Mouanda Makonda
KEYWORDS:
Foreign Direct Investment, Forest Resource, Congo Basin
JOURNAL NAME:
Theoretical Economics Letters,
Vol.11 No.1,
February
26,
2021
ABSTRACT: The objective of this article is to analyze the
effects of forest resources on the reception of foreign direct investment in
the countries of the Congo Basin. The panel data used cover the period
1996-2018 and are extracted from the World Bank’s WDI and WGI databases. The
spatial autocorrelation of FDI inflows into the Congo Basin motivates the use
of a Spatial Dynamic Durbin Model (SDM). The results of the estimation of this
model by the maximum likelihood method show that forest resources have a
significant positive effect on FDI inflows and that the spillover effects of
inflows from the neighborhood (ρ) are also positive and significant. These
results imply the need for: 1) the generalization of logging in forest concessions while encouraging
their certification and 2) the subregional harmonization of a repressive
mechanism in cases where the legal and regulatory texts regarding logging are
violated.