This thesis focuses on the relationship between trade and FDI in the SADC. While FDI is
seen as a stimulus for growth and development, Africa is lagging behind other regions
in attracting FDI. Whilst a number of reasons have been explored in the literature, the
potential link between trade and FDI has not been explored in the African context. This
may be potentially important, since African governments have been engaging in trade
liberalisation and trade promotion over the past two decades. In this thesis, gravity
modelling is used to investigate the trade-FDI relationship. Two single equation
regression models are used in a preliminary investigation to evaluate aggregate trade
and FDI. The third model consists of six panel regressions that evaluate the different
relationships between the individual SADC countries and their individual major trading
partners. A causality test is also carried out to confirm the relevance of trade as a
determinant of FDI in the SADC. Overall results indicate that, in the specific case of the
SADC, SADC exports significantly cause FDI. Distance from home countries and
political instability are the most significant negative forces that affect FDI inflows. Home
country exports deliver mixed results and these results suggest that the United States
and the United Kingdom have a different FDI-trade relationship with the SADC than
continental Europe, whereas Japan's exports prove insignificant. The policy implications
are that the SADC will need to focus on attracting investment from countries that
provide for complementary FDI and trade as this is optimal for poverty alleviation and
job creation. Further research should focus on these policy areas and take into account
the relevance of trade as a determinant of FDI. / Thesis (Ph.D. (Economics))--North-West University, Potchefstroom Campus, 2007.
| Identifer | oai:union.ndltd.org:NWUBOLOKA1/oai:dspace.nwu.ac.za:10394/1576 |
| Date | January 2007 |
| Creators | Bezuidenhout, Henri |
| Publisher | North-West University |
| Source Sets | North-West University |
| Detected Language | English |
| Type | Thesis |
Page generated in 0.0021 seconds