Foreign Direct Investment and Export Competitiveness in Africa: Investigating the Channels

Abstract

The rise in globalization over the past 30 years has resulted in rapid changes and mobility of technologies and internationalization of production of goods and services through Foreign Direct Investment (FDI) and trade. In line with these trends, Africa has witnessed a surge in FDI in recent years. For instance, FDI increased from US$5 billion in 1995 to US$48 billion in 2015 United Nations Conference on Trade and Development (UNCTAD, 2016). At the same time, the rise in globalization has exposed many African countries to the pressures of international trade competition. This has raised the question of whether FDI could play a role in enhancing export competitiveness in Africa.