Does trade liberalization promote investment in Sub-Saharan Africa? Evidence from selected free trade areas
DOI:
https://doi.org/10.13133/2037-3643/18794Keywords:
foreign direct investment, domestic investment, trade liberalization, AfricaAbstract
This study investigates the impact of trade liberalisation on foreign and domestic investment in selected African free trade areas. Using 29 countries that are members of the three regional economic communities, namely, the East African Community, the Common Market for East and Southern Africa, Southern African Development Community, and data for the period 2000 to 2019, results from various panel models show that trade liberalisation indicators used have heterogenous effects on investment in these regional economic communities. This is partly explained inter-alia by, differences in the ease of doing business environment, variances in the levels of economic growth, and lack of ratification and domestication of some regional investment agreements. Countries must reduce non-tariff barriers if they are to boost investment.
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