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Abstract

In the literature researchers examined the impact of foreign direct investment on growth and development of African developing countries but ignored the relationship of Greenfield investment and socioeconomic development including education, health and economic growth. African developing countries are abundant of natural resources and cheap labor and are considered as the attractive places for investment. This study make an attempt of balanced panel data set of a sample of 31 African developing countries on a time period of 1998-2017 using GMM technique. The study used HDI as proxy for socioeconomic development including education index, health index and income index as proxies for education, health and economic growth. After checking the Stationarity, the results of this study revealed that Greenfield-FDI has statistically significant and positive impact on education, health, economic growth and socioeconomic development of African developing countries. The study further found that controlled variables remittances and foreign aid has positive and negative relationship with all dependent variables respectively. Other controlled variables i.e. trade openness, population and inflation have mixed results. This study suggested on the basis of its findings that governments must focus on the economic and business policies to attract more foreign investment. The government should make safe friendly business environment for the multinational companies to accommodate cheap labor force of their own countries.