Publication

This study presents an empirical survey of the patterns of trade and Foreign Direct Investments (FDI) in Africa based on a sample of 28 countries and their transactions with the OECD countries. These patterns are used to test whether the predictions of the new trade theory with multinationals as described by Markusen and Venables fit developments in Africa. The study finds only weak evidence supporting such a pattern. The paper shows that trade barriers, geographical distance, income per capita and ocean access explain much of the variation in trade and FDI in Africa.