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Nonlinear Effects of Trade Integration on Foreign Direct Investment in Sub‐Saharan Africa

Author

Listed:
  • Kolo Nebie
  • Idrissa Ouedraogo
  • Relwendé Sawadogo

Abstract

This research analyses the effects of trade integration on foreign direct investment (FDI) in a dynamic panel of 30 sub‐Saharan African countries over the period 2002–2022. It uses the Pull and Push factors model, which is estimated by the two‐step system generalized method of moments. The results show that trade integration fosters FDI. However, this positive effect becomes negative when trade integration exceeds the 103% threshold. The results imply that policymakers in Sub‐Saharan Africa should control trade integration to attract FDI to their countries.

Suggested Citation

  • Kolo Nebie & Idrissa Ouedraogo & Relwendé Sawadogo, 2026. "Nonlinear Effects of Trade Integration on Foreign Direct Investment in Sub‐Saharan Africa," American Journal of Economics and Sociology, Wiley Blackwell, vol. 85(1), pages 63-81, January.
    • Handle: RePEc:bla:ajecsc:v:85:y:2026:i:1:p:63-81
    DOI: 10.1111/ajes.70003
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