Trade and Foreign Direct Investment nexus in West Africa: Does Export Category Matter?

This paper examines the effect of inward FDI in West Africa on exports to EU countries. It investigates from a host country perspective, the impact of FDI on different export categories: primary, intermediate, and final goods. 

Trade and Foreign Direct Investments are the key divers of economic integration and the globalization process. The widely held view is that both trade and FDI are beneficial, as the former can stimulate innovation, productivity, competitiveness, and diversification; and the latter increases the capital stock, provides new job opportunities, and promotes the transfer of technology. Thus there have been profound calls within international organizations for developing countries to encourage both trade and FDI in order achieve robust economic growth and development. However, critics argue that trade, particularly imports, can create undue competition and stifle indigenous manufacturing; and inward FDI can also displace domestic firms. Similarly, from a source country perspective, outward FDI can lead to loss of jobs as multinationals move job opportunities overseas

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