FDI–Trade Interaction and Economic Growth in Developing Regions: Cross-Regional Evidence from Asia, Sub-Saharan Africa, and Latin America — Replication Package

This repository contains the replication package for the paper "Foreign Direct Investment, Net Trade Balance, and Economic Growth: Interactive Effects in Asia, Sub-Saharan Africa, and Latin America." The study examines how trade structure conditions the long-run growth returns to foreign direct investment across 115 developing economies in Asia, Sub-Saharan Africa (SSA), and Latin America over the period 1970–2023. Using Pooled Mean Group (PMG) and Dynamic Fixed Effects (DFE) estimators, the analysis uncovers a cross-regional sign reversal in the FDI–trade interaction: negative in Asia and Latin America, where trade composition constraints and macroeconomic volatility neutralise foreign capital, but positive and significant in SSA, where trade amplifies FDI's growth returns. Within SSA, the Anglophone–Francophone colonial divide — with the CFA franc monetary architecture as the binding institutional differentiator — generates structurally distinct FDI–trade–growth regimes. Package contents: Stata do-files for all estimation procedures (PMG, DFE, IV/2SLS, System GMM) Panel dataset in Stata (.dta) and CSV formats, covering 115 countries, 1970–2023 Instrument construction code (Bartik shift-share and Lewbel heteroskedasticity-based instruments) Output tables and figures as reported in the manuscript Codebook with variable definitions, sources, and cleaning procedures Data sources: World Bank World Development Indicators (WDI), UNCTAD World Investment Report, IMF Balance of Payments Statistics, Federal Reserve (FEDFUNDS), and World Bank Primary Commodity Price Index. Software: Stata 17. Required user-written commands: xtpmg, xtivreg2, xtabond2.