This paper aims at investigating the short and long run determinants of Foreign Direct Investment (FDI) flow into Sudan, using cointegration and Vector Error Correction Model (VECM). The long-run analysis indicates that FDI flows are positively influenced by market size, trade openness, human capital and infrastructure in attracting FDI. Unlike the long-runs results, the analysis of short-run reveals that FDI flows are negatively influenced by exchange rate and inflation. The results of short-run analysis also show that oil was an important encouraged the substantial flow of FDI in the last decade. Moreover, the error term coefficient is found to be negative and significant, supporting the long-run analysis. Based on these findings, the paper concludes with some policy recommendations regarding the factors that facilitating the flow of FDI into Sudan
Keywords: FDI, FDI determinants, Cointegration, VECM, Sudan, JEL classification:F2, F23, C13.
Copyright © 2019 Author(s) retain the copyright of this article.
This article is published under the terms of the Creative Commons Attribution License 4.0