Martyna Bieleń

Faculty of Economics, University of Economics in Katowice,

Poland

martyna.bielen@edu.uekat.pl

ORCID 0000-0002-9228-6784

Diversity within commonality: A comparative study of the impact of foreign direct investment and trade openness on economic growth

Kingsley Success Ikani

Faculty of Economics, University of Economics in Katowice,

Poland

kingsley.ikani@edu.uekat.pl

ORCID 0000-0001-7499-6136

Julia Włodarczyk

Faculty of Economics, University of Economics in Katowice,

Poland

julia.wlodarczyk@ue.katowice.pl

ORCID 0000-0001-5689-454X

Abstract. The relationships between foreign direct investment (FDI), trade openness, and economic growth are complex and analyzed by many researchers. Still, there are some gaps in our knowledge as literature documents positive, negative, and ambiguous impact of FDI and trade openness on economic growth. This paper addresses one of these gaps and focuses on the similarities and differences among countries from Central and Eastern Europe and West Africa. The econometric analysis covers the 1995-2022 period and employs panel data methods to reveal the long-term positive impact of FDI and trade openness on economic growth in West African countries and long-term positive impact of FDI on economic growth in Central and Eastern European countries. We also demonstrate that apart from cross-border linkages captured by FDI and trade flows, economic growth in Central and Eastern European countries positively correlates with global economic development, however, in case of West Africa this effect is statistically insignificant.

Received: April, 2023

1st Revision: January, 2024

Accepted: March, 2024

DOI: 10.14254/2071-8330.2024/17-1/10

JEL Classification: F14, F21, F43, O57

Keywords: foreign direct investment, trade openness, economic growth, Central and Eastern Europe, West Africa