Foreign direct investment and trade in the Southern African development community

Arbeitspapier

We use a modified gravity model to estimate the relationship between trade and foreign direct investment (FDI) in the Southern African Development Community (SADC). We find evidence of a significant causal relationship from SADC's exports to inward FDI. Distance (reflecting remoteness and transport costs) and political instability are confirmed to be significant determinants of FDI to SADC. We discern differences in the patterns and determinants of FDI to SADC, whether it is from the USA and UK or from continental Europe. In the case of FDI to SADC from the USA and UK, it is exports from SADC to these countries that are significant, and not imports, while, in the case of continental Europe, both exports and imports are significantly associated with FDI to SADC.

Object Details

• ISBN: 978-92-9230-142-2
• Language: Englisch

References and Relationships

• Bibliographic citation: Series: WIDER Research Paper ; No. 2008/88

Classification and Topics

• Classification: Wirtschaft ; International Investment; Long-term Capital Movements ; Empirical Studies of Trade ; Multinational Firms; International Business ; Economic Development: Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
• Subject: FDI ; SADC ; South Africa ; exports ; gravity model ; Direktinvestition ; Außenhandel ; SADC-Staaten

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Bezuidenhout, Henri ; Naudé, Wim
• Event: Veröffentlichung
• (who): The United Nations University World Institute for Development Economics Research (UNU-WIDER)
• (where): Helsinki
• (when): 2008

Further information

• Handle: http://hdl.handle.net/10419/45133
• Last update: 10.03.2025, 11:43 AM CET