The Role of Exports, FDI and Imports in Development: Evidence from Sub-Saharan African Countries
Posted: 24 Aug 2014
Date Written: August 22, 2011
The disappointing economic performance of Sub-Saharan African (SSA) economies in the late 1980s prompted reforms in foreign trade and Foreign Direct Investment (FDI) in the early 1990s. Using the Autoregressive Distributed Lag (ARDL) approach and Pedroni panel estimation procedures that allow for heterogeneity, this study found that exports and FDI have a significant impact on economic growth. Granger-type causality tests show the interrelatedness of exports, FDI, imports and income variables. The results also provide evidence of a two-stage causal chain of exports, imports and income. This article calls for more market-oriented policy reforms in SSA countries.
Keywords: Africa, FDI, Causality, Imports, Exports
JEL Classification: C51, F14, F43
Suggested Citation: Suggested Citation