Institutional quality, openness, and investment in Africa

Kandiero, Tonia; Wadhawan, Satish

doi:10.4102/sajems.v6i2.3318

Cited by 6 publications

(5 citation statements)

References 36 publications

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“…However, Kandiero and Wadhawan [2003], maintains that this measure of trade openness may in actual fact fail to completely capture trade openness in a particular economy.…”

Section: Trade Opennessmentioning

confidence: 96%

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FDI and Trade Policy Openness in Sub-Saharan Africa

Cantah

Brafu-Insaidoo

Wiafe³

et al. 2018

Eastern Econ J

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Trade openness is an important determinant of Foreign Direct Investment (FDI) inflows into Sub-Saharan Africa (SSA). Consequently, studies have examined the relationship between FDI inflows and trade openness. This study develops a new measure of trade openness to re-examine the relationship between FDI inflows and trade policy openness using principal component analysis. This new measure captures the ease of trading activities and trade tariffs. Dynamic panel estimation technique was employed to analyze the relationship between trade policy openness and FDI inflows in SSA countries. The results indicate that an open economy attracts FDI. The study recommends efforts at reducing cost of trade.

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“…However, Kandiero and Wadhawan [2003], maintains that this measure of trade openness may in actual fact fail to completely capture trade openness in a particular economy.…”

Section: Trade Opennessmentioning

confidence: 96%

“…Issues related to the measurement of a variable are potentially a problem for all analytical work, though more acute for openness variables [Kandiero and Wadhawan 2003]. This is because it still appears to be problematic to find reliable systematic data on trade policies across various countries.…”

Section: Trade Opennessmentioning

confidence: 99%

FDI and Trade Policy Openness in Sub-Saharan Africa

Cantah

Brafu-Insaidoo

Wiafe³

et al. 2018

Eastern Econ J

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“…Promoting economic openness to the rest of world in the presence of poor institutional quality as characterized by corruption, weak rule of law, ineffective government and regulatory quality, and poor contract enforcement policies may encourage more rent-seeking behavior by the bureaucrats, resulting in an adverse effect on the economic performance of the countries. In other words, weakness in the institutional environment diverts resources from productive sectors to the less productive and rent-seeking sectors (Kandiero and Wadhawan 2003).…”

Section: China-africa Trade and Economic Growthmentioning

confidence: 99%

The Impacts of Chinese FDI and China–Africa Trade on Economic Growth of African Countries: The Role of Institutional Quality

et al. 2020

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While there is a consensus on the expanding importance of the China–Africa economic relationship, there is much more debate on how to portray the relationship. Thus, this study is aimed to examine the impacts of the China–Africa trade and Chinese foreign direct investment (FDI) on the growth of African countries controlling the mediating role of institutional quality. The two-step system Generalized method of moments (GMM) model is applied using robust data for the period of 2003–2017. Drawing on complementary theoretical perspectives, this study took into account the conditional effect of China–Africa trade and Chinese FDI subject to the institutional quality of African countries and the interdependence of China–Africa trade and Chinese FDI to African countries. The benign impacts of the China–Africa trade and Chinese FDI on economic growth to African countries remain contingent upon appropriate policy action to improve the institutional quality of African countries and the synergies between the China–Africa trade and Chinese FDI to African countries.

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“…For our particular purpose of looking at the impact of openness in different sectors on FDI, we also adhere to this useful but imperfect measure. Kandiero and Wadhawan (2003) provide a detailed discussion on openness to trade and measurement problems associated with this variable. We use the economy-wide international trade taxes data to test if our economy-wide openness variable is robust.…”

Section: Openness To Tradementioning

confidence: 99%

Trade openness and foreign direct investment in Africa

Kandiero

Chitiga

2014

SAJEMS

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Africa’s share of foreign direct investment (FDI) has lagged behind other regions in the world, despite a sharp increase in FDI inflows to the region in 2001. Factors contributing to this circumstance include perceptions of high corruption, weak governance and poor infrastructure. The motivation of this paper is to investigate the impact of openness to trade on the FDI inflow to Africa. In addition to economy-wide trade openness, we also analyse the impact on FDI of openness in manufactured goods, primary commodities and services. The empirical work uses cross-country data from selected African countries observed over four periods: 1980-1985, 1985-1990, 1990- 1995 and 1995-2001. We find that the FDI to GDP ratio responds well to increased openness in the whole economy and in the services sector in particular.

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Institutional quality, openness, and investment in Africa

Cited by 6 publications

References 36 publications

FDI and Trade Policy Openness in Sub-Saharan Africa

FDI and Trade Policy Openness in Sub-Saharan Africa

The Impacts of Chinese FDI and China–Africa Trade on Economic Growth of African Countries: The Role of Institutional Quality

Trade openness and foreign direct investment in Africa

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