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Assessing the impact of international trade and FDI in driving economic development in West Africa: the role of urbanization

Author

Listed:
  • Yakubu Awudu Sare

    (Simon Diedong Dombo University of Business and Integrated Development Studies)

  • Joseph Owusu Amoah

    (Simon Diedong Dombo University of Business and Integrated Development Studies)

  • Bernard Bawuah

    (Simon Diedong Dombo University of Business and Integrated Development Studies)

Abstract

The study examines the association between international trade, foreign direct investments (FDI), and economic development and how urbanization impacts this relationship. We employed a resource-based view and the new trade theoretical conceptualization to examine this nexus. The study utilized panel data from 13 West African nations from 2000 to 2022. We used the Common Correlated Effects Mean Group and Augmented Mean Group estimators for the empirical analysis. The findings show that importing negatively affects economic development, while exporting positively drives economic development. Additionally, concerning FDI, the results suggest that both inflows and outflows contribute to economic development. The study also found that urbanization exerts positively influence on international trade, FDI and economic development. The findings affirm the significance of prioritizing effective urban planning policies and export activities for economic growth and emphasize the need to support foreign direct investment.

Suggested Citation

  • Yakubu Awudu Sare & Joseph Owusu Amoah & Bernard Bawuah, 2025. "Assessing the impact of international trade and FDI in driving economic development in West Africa: the role of urbanization," SN Business & Economics, Springer, vol. 5(1), pages 1-30, January.
    • Handle: RePEc:spr:snbeco:v:5:y:2025:i:1:d:10.1007_s43546-024-00765-9
    DOI: 10.1007/s43546-024-00765-9
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