Governance and portfolio flows in Sub-Saharan Africa

Abstract

This study investigates the relationship between the six World Governance Indicators and foreign portfolio investment in 33 Sub-Saharan African (SSA) countries over the years of 1998–2015. GMM analysis finds that portfolio inflows are most significantly attracted by the ability of SSA governments to implement policies effectively, strengthening the quality of institutions, and controlling corruption; but are deterred by the regions poor record of the rule of law and political stability.