The comparative influence of foreign direct investment (FDI) inflows on export performance between landlocked and coastal African countries

This study investigates the differential influence of foreign direct investment on export performance in landlocked and coastal African economies during 1996 to 2023. By addressing, structural differences across geographical based panels, an issue that received limited attention in existing studies, contributes to foreign direct investment export linkage literature. The study employed Kao and Pedroni panel cointegration and Granger causality tests with Pooled Mean Group estimator. Both cointegration tests revealed existence of long-run equilibrium relationship among the variables. The finding revealed FDI positively affect export in coastal countries, while its effect in landlocked countries is insignificant, suggesting that coastal countries are converting FDI inflows into export expansion through their advantage of port access and integration into international value chains. While, trade openness has positive effect on export in both short and long term regardless of geographic difference. Although, exchange rate depreciation enhances export in the long-run for both panels its short run effect is negative. Infrastructure development boosts export in both long and short run in coastal countries but is has a negative effect for landlocked counterpart in the long run, which is attributed to quality and institutional performance. Political stability has positive short and long run impact on export expansion, although its impact in landlocked country is negligible. the study highlights, geography significantly conditions the export enhancing effect of FDI. Policy makers shall emphasize targeted trade facilitation reforms and infrastructural investment in landlocked economies, while coastal counterpart shall prioritize improving international value chains, infrastructure development, port efficiency and political stability to sustain export competitiveness.