Publication: Patterns of Foreign Direct Investment Flows and Trade-Investment Inter-Linkages in Southern Africa : Linking Middle-Income and Low-Income Neighbors
Loading...
Published
2010-05
ISSN
Date
2013-03-27
Author(s)
Editor(s)
Abstract
This report discusses the patterns of foreign direct investment flows and trade-investment inter-linkages in Southern Africa. It will discuss how cross-border investment flows create a possible channel of growth spillover from South Africa and other MICs to LICs in the subregion, and identify the roles of subregional trade and investment flows in generating these neighborhood effects with LICs. After an introduction with background on the subregion of Southern Africa, Section 2 provides facts on the patterns of trade in Southern African countries to illustrate how much (or little) the Southern African subregion is integrated today and whether or not intraregional trade is growing. Section 3 presents aggregate trends in foreign direct investment flows (and stocks) in SSA, discusses how SASR is situated in such trends, and analyzes the emerging trends of intra-SASR cross-border investments, largely driven by South Africa. Section 4 analyzes trade-investment linkages in Southern Africa at the firm level. Section 5 discusses areas of domestic policies in enhancing trade and foreign direct investment in Southern Africa. Section 6 summarizes the findings from this analysis and discusses their policy implications.
Link to Data Set
Citation
“Isik, Gozde; Yoshino, Yutaka. 2010. Patterns of Foreign Direct Investment Flows and Trade-Investment Inter-Linkages in Southern Africa : Linking Middle-Income and Low-Income Neighbors. © World Bank. http://hdl.handle.net/10986/12990 License: CC BY 3.0 IGO.”
Digital Object Identifier
Associated URLs
Associated content
Other publications in this report series
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication Trade Integration as a Way Forward for the Arab World : A Regional Agenda(2011-02-01)The current political turmoil for more open and participative societies in many Arab countries coupled with the emergence of new growth poles around the world could create the conditions for a big push toward greater regional and global trade integration of the Arab world. Further integrating Arab countries among themselves and opening up the region to the rest of the world are two complementary avenues to improve market access, promote behind-the-border regulatory reforms, facilitate cooperation on regional public goods, foster the emergence of an "Arab factory" through regional supply chains and productions networks, and eventually create the conditions for more and better paid jobs for the growing Arab workforce. A more ambitious trade agenda in the context of the Pan-Arab Free Trade Area would be a good place to start. Although difficult and challenging, and requiring a good dosage of flexibility and variable geometry, such an agenda would consist of (1) completing the free movement of goods within the Pan-Arab Free Trade Area, notably through the elimination of unnecessary non-tariff barriers; (2) implementing a regional initiative to liberalize services trade, including identifying a number of pilot service sectors for early regional liberalization; and (3) strengthening the rules and discipline applicable to regional trade and other policies of common interest.Publication CGE Modeling of Market Access in Services(World Bank, Washington, DC, 2012-06)This paper examines how the applied multi-sector computable general equilibrium (CGE) literature has moved into quantication of the impacts of greater market access for services. This includes discussion of multi-sector linkages to the service sector, as well both measuring barriers to trade and investment (generally with a mix of firm surveys, price comparisons, and econometrics), and how changes in these barriers, however measured, have been implemented in the CGE literature. Three challenges are highlighted. The first is identification of how trade in services takes place and how market access is therefore affected by policy. The second is to find data sufficiently robust for modeling purposes. The third, linked to the data problem, is to quantify the barriers to be examined. Significant progress has been made in modeling foreign direct investment and linking this to productivity, which turns out to be important. The paper also provides an example of modeling productivity linkages to openness and domestic regulation, with an applied CGE model of Italy. This illustrates cross-sector linkages and the integration of economic data and policy measures to define service sector experiments. Priorities for future research include better modeling of market structure, the linkages between sectors and the complementarities between different modes of supplying services.Publication Beyond Trade : The Impact of Preferential Trade Agreements on Foreign Direct Investment Inflows(World Bank, Washington, DC, 2006-11)The author investigates the effects of preferential trade agreements (PTAs) on the net foreign direct investment (FDI) inflows of member countries using a comprehensive database of PTAs in a panel setting. He finds that PTA membership is associated with a positive change in net FDI inflows, and the FDI gains are increasing in the market size of the PTA partners and their proximity to the host country. The author identifies several different channels through which preferential trade liberalization may affect FDI, and confirms that both threshold effects (signing the agreement) and market size effects (joining a larger and faster-growing common market) are important determinants of net FDI inflows, although the latter seem to dominate. The estimated relationship is largely driven by North-South PTAs, and is most pronounced in the late 1990s and early 2000s, the period when the majority of "deep integration" PTAs had been advanced.Publication The Business Environment in Southern Africa : Issues in Trade and Market Integration - Summary(World Bank, 2010-12-31)This report assesses some of the key barriers to greater trade and factor market integration in the Southern Africa Development Community (SADC). The SADC has been a free trade area since 2008, and has an ambitious agenda for further trade integration. This report assesses the roles that cross-country differences in business environments have had in impeding cross-border trade flows and the cross-border integration of credit markets and the labor market based on the analysis of microeconomic data on firms and households. The aim of the assessment is to help inform the policy and business environment harmonization agenda of the community. The full report discusses and illustrates the use of price data in monitoring intraregional trade integration. The report evaluates the extent of integration of labor markets among members the statistical agencies of which regularly collect the minimum data required for this purpose, which are South Africa, Mauritius, Tanzania, and Zambia. The results show that, although there is considerable integration of South Africa's labor market with many others in the region, the degree of integration is rather low. This reflects the fact that both trade and capital flows are far more restricted in the region than in places where there is greater cross-border labor market integration.Publication Africa's Silk Road : China and India's New Economic Frontier(Washington, DC: World Bank, 2007)As illustrated in Africa's Silk Road: China and India's New Economic Frontier, the new South-South economic relations present real opportunities-as well as challenges-to African countries. They also highlight the need for complementary reforms by China and India to support more vigorous African development. In analyzing Africa's intensifying relationships with China and India, Africa's Silk Road examines the trends to date and considers the implications of these developments for the economic future of the African continent. The diagnosis cautions that the opportunities engendered by China and India's trade and investment with Africa will not necessarily be converted into growth and poverty reduction in the region. A critical finding of the study is that it is not just the quantity of these trade and investment flows that matters-it is also the quality of the overall commercial relationships underlying as well as shaping these flows. This paper contains the following headings: connecting two continents; performance and patterns of African-Asian trade and investment flows; challenges at the border - Africa and Asia's trade and investment policies; behind-the-border constraints on African-Asian trade and investment flows; between-the-border factors in African-Asian trade and investment; and investment-trade linkages in African-Asian commerce - scale, integration, and production networks.
Users also downloaded
Showing related downloaded files
Publication Classroom Assessment to Support Foundational Literacy(Washington, DC: World Bank, 2025-03-21)This document focuses primarily on how classroom assessment activities can measure students’ literacy skills as they progress along a learning trajectory towards reading fluently and with comprehension by the end of primary school grades. The document addresses considerations regarding the design and implementation of early grade reading classroom assessment, provides examples of assessment activities from a variety of countries and contexts, and discusses the importance of incorporating classroom assessment practices into teacher training and professional development opportunities for teachers. The structure of the document is as follows. The first section presents definitions and addresses basic questions on classroom assessment. Section 2 covers the intersection between assessment and early grade reading by discussing how learning assessment can measure early grade reading skills following the reading learning trajectory. Section 3 compares some of the most common early grade literacy assessment tools with respect to the early grade reading skills and developmental phases. Section 4 of the document addresses teacher training considerations in developing, scoring, and using early grade reading assessment. Additional issues in assessing reading skills in the classroom and using assessment results to improve teaching and learning are reviewed in section 5. Throughout the document, country cases are presented to demonstrate how assessment activities can be implemented in the classroom in different contexts.Publication Argentina Country Climate and Development Report(World Bank, Washington, DC, 2022-11)The Argentina Country Climate and Development Report (CCDR) explores opportunities and identifies trade-offs for aligning Argentina’s growth and poverty reduction policies with its commitments on, and its ability to withstand, climate change. It assesses how the country can: reduce its vulnerability to climate shocks through targeted public and private investments and adequation of social protection. The report also shows how Argentina can seize the benefits of a global decarbonization path to sustain a more robust economic growth through further development of Argentina’s potential for renewable energy, energy efficiency actions, the lithium value chain, as well as climate-smart agriculture (and land use) options. Given Argentina’s context, this CCDR focuses on win-win policies and investments, which have large co-benefits or can contribute to raising the country’s growth while helping to adapt the economy, also considering how human capital actions can accompany a just transition.Publication World Development Report 2006(Washington, DC, 2005)This year’s Word Development Report (WDR), the twenty-eighth, looks at the role of equity in the development process. It defines equity in terms of two basic principles. The first is equal opportunities: that a person’s chances in life should be determined by his or her talents and efforts, rather than by pre-determined circumstances such as race, gender, social or family background. The second principle is the avoidance of extreme deprivation in outcomes, particularly in health, education and consumption levels. This principle thus includes the objective of poverty reduction. The report’s main message is that, in the long run, the pursuit of equity and the pursuit of economic prosperity are complementary. In addition to detailed chapters exploring these and related issues, the Report contains selected data from the World Development Indicators 2005‹an appendix of economic and social data for over 200 countries. This Report offers practical insights for policymakers, executives, scholars, and all those with an interest in economic development.Publication Digital Africa(Washington, DC: World Bank, 2023-03-13)All African countries need better and more jobs for their growing populations. "Digital Africa: Technological Transformation for Jobs" shows that broader use of productivity-enhancing, digital technologies by enterprises and households is imperative to generate such jobs, including for lower-skilled people. At the same time, it can support not only countries’ short-term objective of postpandemic economic recovery but also their vision of economic transformation with more inclusive growth. These outcomes are not automatic, however. Mobile internet availability has increased throughout the continent in recent years, but Africa’s uptake gap is the highest in the world. Areas with at least 3G mobile internet service now cover 84 percent of Africa’s population, but only 22 percent uses such services. And the average African business lags in the use of smartphones and computers as well as more sophisticated digital technologies that catalyze further productivity gains. Two issues explain the usage gap: affordability of these new technologies and willingness to use them. For the 40 percent of Africans below the extreme poverty line, mobile data plans alone would cost one-third of their incomes—in addition to the price of access devices, apps, and electricity. Data plans for small- and medium-size businesses are also more expensive than in other regions. Moreover, shortcomings in the quality of internet services—and in the supply of attractive, skills-appropriate apps that promote entrepreneurship and raise earnings—dampen people’s willingness to use them. For those countries already using these technologies, the development payoffs are significant. New empirical studies for this report add to the rapidly growing evidence that mobile internet availability directly raises enterprise productivity, increases jobs, and reduces poverty throughout Africa. To realize these and other benefits more widely, Africa’s countries must implement complementary and mutually reinforcing policies to strengthen both consumers’ ability to pay and willingness to use digital technologies. These interventions must prioritize productive use to generate large numbers of inclusive jobs in a region poised to benefit from a massive, youthful workforce—one projected to become the world’s largest by the end of this century.Publication Lebanon Economic Monitor, Fall 2022(Washington, DC, 2022-11)The economy continues to contract, albeit at a somewhat slower pace. Public finances improved in 2021, but only because spending collapsed faster than revenue generation. Testament to the continued atrophy of Lebanon’s economy, the Lebanese Pound continues to depreciate sharply. The sharp deterioration in the currency continues to drive surging inflation, in triple digits since July 2020, impacting the poor and vulnerable the most. An unprecedented institutional vacuum will likely further delay any agreement on crisis resolution and much needed reforms; this includes prior actions as part of the April 2022 International Monetary Fund (IMF) staff-level agreement (SLA). Divergent views among key stakeholders on how to distribute the financial losses remains the main bottleneck for reaching an agreement on a comprehensive reform agenda. Lebanon needs to urgently adopt a domestic, equitable, and comprehensive solution that is predicated on: (i) addressing upfront the balance sheet impairments, (ii) restoring liquidity, and (iii) adhering to sound global practices of bail-in solutions based on a hierarchy of creditors (starting with banks’ shareholders) that protects small depositors.