Journal of Management and Sustainability; Vol. 10, No. 1; 2020 ISSN 1925-4725 E-ISSN 1925-4733 Published by Canadian Center of Science and Education 162 Statistical Capacity, Human Rights and FDI in Sub-Saharan Africa Patterns of FDI Attraction in Sub-Saharan Africa Alexander Kriebitz 1 & Laud Ammah 1 1 Chair of Business Ethics, TUM School of Governance, Technical University of Munich, Germany Correspondence: Alexander Kriebitz, Chair of Business Ethics, TUM School of Governance, Technical University of Munich, Arcisstr. 21, 80333 Muenchen, Germany. E-mail: a.kriebitz@tum.de Received: April 20, 2020 Accepted: May 20, 2020 Online Published: May 26, 2020 doi:10.5539/jms.v10n1p162 URL: https://doi.org/10.5539/jms.v10n1p162 Abstract Foreign Direct Investment (FDI) is commonly perceived as one of the main drivers of technological progress and socio-economic development. At the same time, FDI is often regarded as an instrument of stabilising authoritarian regimes, which disenfranchise the rights of citizens to increase rents generated by foreign firms. Given that both views are accurate, the improvement of human rights and economic development could constitute two conflicting goals. This particularly applies to Sub-Saharan Africa, where a sizeable number of countries are mired in poverty and governed by authoritarian power structures. In evaluating the importance of these soft factors, we examine two important institutional factors of FDI attraction: We address the question of whether human rights violations deter FDI attraction and explore whether FDI depends on the amount of available socio-economic information about the country to be invested in. For the latter, we use a novel variable, namely the Statistical Capacity Figures of the World Bank, which depicts an indicator of effectiveness of the national statistical systems. In order to analyse the relationship between human rights and FDI, we run a regression model covering 41 Sub-Saharan countries covering the years from 2006 to 2015. Keywords: investment in Sub-Saharan Africa, human rights and foreign investment, development policy, multinationals and authoritarian regimes, institutions, and economic growth. 1. Introduction Economists typically regard the attraction of foreign companies as an instrument, which generates technological spillovers, raises the development level and integrates emerging markets in the global supply chain (c.f., Smith, 1997; Anyanwu & Erhijakpor, 2004). According to current research on the economic miracles of China (Naughton & Lardy, 1996) and Vietnam (Hoang et al., 2010), FDI was conducive for economic growth and foreign trade, while other studies highlight the importance of FDI for the reduction of absolute poverty (c.f., De Mello, 1999; Klein et al., 2001; Ogunniyi & Igberi, 2014). The positive perception of FDI as an instrument for growth has resulted in the liberalisation of foreign trade regimes and regulatory changes in order to attract international investors (c.f., Coorey & Vadlamnati, 2015). At first glance, Sub-Saharan Africa is endowed with conditions favourable for trade and investment. However, despite its vast landmass, endowment with natural resources, pool of cheap labour and sheer market size, FDI remains underrepresented and oscillates between 1-2% of the global investment stock. Considering the population size of the region, which represents 17% of the world population, which is likely to account for 40% of the global population in the future, and its abundance of natural resources ranging from coal to rare earths, the stark contrast between potential and real FDI is astounding.