Does Foreign Direct Investment Promote Exports? Evidence from African Countries

Mijiyawa, Abdoul’ Ganiou

doi:10.1111/twec.12465

Cited by 25 publications

(19 citation statements)

References 34 publications

(33 reference statements)

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“…Rădulescu and Şerbănescu (2012) showed that FDI in the tradable sector is associated with higher exports in Central and Eastern European countries from 1990 to 2010. Mijiyawa (2016) used data on African countries to test the FDI-exports linkage and found that higher FDI inflows positively and significantly influence exports of goods and services. The study also showed that a large part of the FDI effect is driven by its spillover effects on exports.…”

Section: Empirical Studiesmentioning

confidence: 99%

“…The few studies that analyzed the link between FDI and export performance or competitiveness used either export growth measures or less comprehensive measures of export competitiveness (see, e.g., Lall et al, 2006;Wang and Wei, 2010;Zhang, 2015). In the African context, Mijiyawa (2016) explored the relationship between FDI and exports, but did not consider export competitiveness, which reflects the ability to produce and sell goods competitively in global markets. This leaves a gap in the literature, which calls for deeper analysis.…”

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confidence: 99%

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Foreign Direct Investment and Export Competitiveness in Africa: Investigating the Channels

Gamariel¹,

Hove²

2019

JAT

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The rise in globalization over the past 30 years has resulted in rapid changes and mobility of technologies and internationalization of production of goods and services through Foreign Direct Investment (FDI) and trade. In line with these trends, Africa has witnessed a surge in FDI in recent years. For instance, FDI increased from US$5 billion in 1995 to US$48 billion in 2015 United Nations Conference on Trade and Development (UNCTAD, 2016). At the same time, the rise in globalization has exposed many African countries to the pressures of international trade competition. This has raised the question of whether FDI could play a role in enhancing export competitiveness in Africa. The recent literature on trade highlights the importance of the composition and structure of exports in driving economic growth, by emphasizing that 'what you export matters' (Hausmann et al., 2007; Lederman and Maloney, 2012). Hausmann et al. (2007) showed that countries that produce higher productivity goods and export sophisticated or 'high-tech' goods are more competitive in international markets and they grow faster. Notwithstanding these observations, Africa's share of global exports of high technology products remains low. For instance, while developing countries accounted for 52% of global exports of high technology products in 2014, African countries accounted for only 0.3% (UNCTAD, 2015). Thus, African policy makers are confronted with a challenge of igniting export growth and enhancing export competitiveness. Export competitiveness is important in Africa for several reasons. First, a large strand of the literature, especially on export-led growth hypothesis, suggests that exports are the main determinants of a country's Gross Domestic Product (GDP) growth (see,

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Section: Empirical Studiesmentioning

confidence: 99%

mentioning

confidence: 99%

Foreign Direct Investment and Export Competitiveness in Africa: Investigating the Channels

Gamariel¹,

Hove²

2019

JAT

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“…It links the domestic economy to the world, creates employment and expands trade. FDI has a direct and indirect effect on a country's productivity that can ultimately help it to achieve economic growth and development (Balasubramanyam et al, 1996;Haruna Danja, 2012;Iamsiraroj and Ulubaşoğlu, 2015;Mijiyawa, 2017;Zilinske, 2010). In this scenario, it is important to examine whether these investments really contribute towards improving the economic indicators of the host country.…”

Section: Introductionmentioning

confidence: 99%

“…Higher exports create well-paid jobs that stimulate productivity by motivating employees. The increase in foreign exchange earnings through export can also be used to import capital goods that are needed to transform the economic structure of developing economies (Herrerias and Orts, 2010;Mijiyawa, 2017). Hence, the expansion of export is an objective of any economy that wishes to achieve economic growth and development.…”

Section: Introductionmentioning

confidence: 99%

Does Inward Foreign Direct Investment Promote Export? Empirical Evidence from Sri Lanka

Samantha

Liu

2018

BER

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Export-led growth hypothesis assumed that long-term economic growth can be achieved through higher exports. Foreign Direct Investment (FDI) is one of the determinants of export performance that can have a substitute effect or complementary relationship to export. The aim of this study is to investigate the impact of inward FDI on the export performance of Sri Lanka during the period from 1980 to 2016. Auto Regressive Distributed Lag (ARDL) model and bound test are applied to identify the long-run relationship and short-run dynamics of the selected variables. The short-run causality is checked by applying the Granger causality test. The ARDL bound test confirms long-run relationship among the variables. The study finds positive insignificant long run and short-run relationships between FDI and exports in Sri Lanka for the data period. Exports are highly sensitive to GDP and real effective exchange rate in the short-run and to domestic investment in the long-run. In order to promote exports via FDI, government policy should focus on attracting more FDI by drawing attention to national competitiveness. The study suggests a comprehensive sector level investigation on the impact of FDI on export performance of Sri Lanka.

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“…According to the savings gap theory, low domestic savings in developing economies lead to low levels of investment and hence also to a relatively low capital stock. Foreign savings in the form of FDI help developing economies to accumulate capital and boost long-run growth in the Solow model (Bosworth et al, 1999;Priewe & Herr, 2005 long-run trade balances (Orr, 1991;UNCTAD 2013, Cieslik andHagemejer, 2014;Mijiyawa, 2016).…”

Section: Potential Effects Of Fdi Inflows On the Balance Of Payments mentioning

confidence: 99%

Natural Resource-Seeking FDI Inflows and Current Account Deficits in Commodity-Producing Developing Economies

Ballesteros

Goda

2017

SSRN Journal

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Does Foreign Direct Investment Promote Exports? Evidence from African Countries

Cited by 25 publications

References 34 publications

Foreign Direct Investment and Export Competitiveness in Africa: Investigating the Channels

Foreign Direct Investment and Export Competitiveness in Africa: Investigating the Channels

Does Inward Foreign Direct Investment Promote Export? Empirical Evidence from Sri Lanka

Natural Resource-Seeking FDI Inflows and Current Account Deficits in Commodity-Producing Developing Economies

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