Evaluating Management Trade Strategies through Trans-global Investment: the Subs-Saharan Africa in Focus

Abstract

In the case of the SSA Economy, the current study aims to evaluate if currency rates and inflation rates influence the dynamic relationship between foreign investment inflows (Foreign Direct Investment, or FDI, and Foreign Portfolio Investment, or FPI) and trade openness. This is done from a managerial perspective. The regressors are foreign investment indexes, while the regressed variables are trade policy initiatives defined by trade openness. The longitudinal research design was adopted in this study. Data from the World Bank database for 2021 was compiled for the article. 30SSA nations out of the 48 in SSA during the 1992–2021 review period were sampled for the study. In the meanwhile, the Robust panel Regression (Panel Corrected Standard Error) approach was used in the study. According to the study, FDI significantly (prob. value = 0.0007<0.05) and positively (coefficient value = 0.977169) affect trade openness. It follows that one of the main indicators of trade openness is FDI inflows. Similarly, trade openness is positively impacted by currency rates. Additionally, FDI has a marginally significant (prob. value = 0.7399>0.05) yet positive (coefficient value = 0.005328) effect. By implication, FPI inflows have a direct but minor impact on trade openness. INFR discourages foreign investors from participating in the local economy. Overall, the paper's conclusions are consistent with a cross-country analysis. As a result, the study suggests that the SSA economy is an important predictor of foreign direct investment and what facilitates trade with other nations. Based on this assumption, the study contends that in order to attract greater foreign direct investment into the SSA economy, government agencies and other relevant sector players must collaborate to implement flexible regulatory rules.