Impact of Foreign Direct Investment on International Trade in West African Economic and Monetary Union Countries Using Dynamic Panel

Abstract

The aim of this paper is to study the impact of foreign direct investment (FDI) on international trade in West African Economic and Monetary Union (WAEMU) countries using the dynamic panel. We also have investigated the effects of other variables on trade flows like financial development, urban population and net imports. Our key finding is that there exists a positive and significant impact of FDI on the international trade of WAEMU countries. Financial development and urban population have positive and statistically significant effects on the international trade of WAEMU countries. The effect of net imports on international trade is positive but not statistically significant.