Abstract

In this paper we use panel data for the period ranging from 1996 to 2013 to investigate the contribution of US foreign direct investment to economic growth in fourteen Sub-Saharan African Countries. We apply a number of empirical models to estimate two different equations; the first equation considered the entire stock of capital including US foreign direct investments while the second equation excluded US direct investment in the sub region from capital stock variable. The results of estimations revealed that domestic capital significantly affect economic growth in these countries but found no evidence that US FDI have any direct effect on economic growth in the host countries. The results also found significant effect of political stability and openness on the growth of Sub Saharan African countries. The implication of these findings is that the region can promote economic growth by mobilizing more domestic resources, ensuring that there is political stability and opening their economies to external competition.