FDI and Trade Policy Openness in Sub-Saharan Africa

  • Godfred William Cantah
  • Gabriel William Brafu-Insaidoo
  • Emmanuel Agyapong Wiafe
  • Abass Adams
Original Article

DOI: 10.1057/eej.2016.9

Cite this article as:
Cantah, G., Brafu-Insaidoo, G., Wiafe, E. et al. Eastern Econ J (2016). doi:10.1057/eej.2016.9
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Abstract

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.

Keywords

FDI Policy Openness FDI 

JEL Classifications

F13 F21 F41 

Copyright information

© Eastern Economic Association 2016

Authors and Affiliations

  • Godfred William Cantah
    • 1
  • Gabriel William Brafu-Insaidoo
    • 1
  • Emmanuel Agyapong Wiafe
    • 2
  • Abass Adams
    • 1
  1. 1.Department of EconomicsUniversity of Cape CoastCape CoastGhana
  2. 2.Department of Banking and FinanceWest End University CollegeKasoaGhana

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