The Impact of Foreign Direct Investment on Exports in COMESA Countries

Abstract

Foreign direct investment has the potential to increase exports which plays at great role in the economic growth of a country. This paper examined the impact of foreign direct investment on disaggregated exports in countries that are members of COMESA for the period of 1993-2012. The empirical results found that there is a positive and significant relationship between foreign direct investment and exports in the agricultural, manufacturing and natural resources sectors. In addition, the magnitude of FDI effect was relatively high. The results also showed that the impact of FDI on exports is larger on manufacturing exports.