Foreign Direct Investment-Trade nexus in sub-Saharan Africa: Does the institutional quality matter?

Jasnine MOGEM Kouam, Luc NEMBOT Ndeffo and Mathurin Aimé MEKAM Pouatcha
Additional contact information
Jasnine MOGEM Kouam: University of Dschang, Faculty of Economics and Management, Dschang, Cameroon
Luc NEMBOT Ndeffo: University of Dschang, Faculty of Economics and Management, Dschang, Cameroon
Mathurin Aimé MEKAM Pouatcha: University of Dschang, Faculty of Economics and Management, Dschang, Cameroon

Economics and Applied Informatics, 2020, issue 2, 5-14

Abstract: This paper investigates the effect of Foreign Direct Investment (FDI) on international trade using 34 sub-Saharan African countries over the period spanning from 1996 to 2017. Especially, we evaluate the role institutional quality play on the FDI-trade nexus. Our analysis was carried out using the System Generalized Methods of Moments (SGMM) to accommodate endogeneity. The following results are established: first, there is a complementarity between FDI and international trade and this result is robust to alternative specifications and other indicators for trade . Secondly, the results showed that, sound institutions help FDI promote trade in the region. Finally, natural resources rents, domestic investments, institutions, population growth and inflation are significant determinants of trade in the region.

Keywords: Foreign Direct Investments; Trade; Institutions; sub-Saharan Africa; SGMM (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.eia.feaa.ugal.ro/images/eia/2020_2/Kouam_Ndeffo_Pouatcha.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ddj:fseeai:y:2020:i:2:p:5-14

DOI: 10.35219/eai15840409100

Access Statistics for this article

More articles in Economics and Applied Informatics from "Dunarea de Jos" University of Galati, Faculty of Economics and Business Administration Contact information at EDIRC.
Bibliographic data for series maintained by Gianina Mihai ().