Why Foreign Direct Investment Goes Where It Goes: A Case Study of ECCAS Countries, 2000 to 2023

This research identifies the factors motivating foreign direct investment (FDI) in the countries of the Economic Community of Central African States (ECCAS) from 2000 to 2023, using a panel of eleven countries. We employed several econometric methods, including Rolled OLS, fixed-effects, random-effects, and GMM system models. The results show that economic growth, trade openness, and gross fixed capital formation are the main drivers of FDI inflows, while heavy dependence on natural resources reduces attractiveness. The analyses also reveal that Institutional variables are significant in some specifications, but not in others, reflecting the predominance of structural factors in the decisions of direct investors. These findings lead to recommendations for strengthening infrastructure, improving governance, and deepening regional integration to create a more favorable environment for sustainable and value-creating foreign investment in ECCAS countries.