Trade liberalization policies and foreign direct investment inflows in Africa: Evidence from new measures of trade liberalization

Abstract

This paper examines the role that trade liberalisation policies play in attracting FDI flows to African economies from 2000 to 2017. This study contributes to the extant literature on the relevance of trade liberalisation policies in developing economies and in particular, African Countries. By employing new measures for trade liberalisation policies, the study estimated a System Generalized Method of Moment model to examine the relationship between trade liberalisation policies and FDI inflows to Africa. The findings suggest that the institutionalisation of policies to enhance trade liberalisation would be germane in attracting higher levels of FDI flows to African economies.

KEYWORDS:

• Trade liberalization
• policies
• foreign direct investments
• Africa

JEL Classifications:

• E61
• F02
• F15

Disclosure statement

No potential conflict of interest was reported by the author(s).