Assessing the Role of Foreign Direct Investment (FDI) Influencing Liberia’s Trade Patterns

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Manufacturing foreign direct investment positively affects trade diversification in Liberia and Africa overall.
Empirical results show a significant association (β = 0.30, p < 0.05) between manufacturing FDI and export diversification.
Panel regression indicates that institutional quality significantly enhances the trade effects of foreign direct investment.
The findings highlight the need for Liberia to shift from extractive FDI to targeted investments in manufacturing and digital services.

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Quantitative analysis reveals that manufacturing FDI boosts trade diversification in Liberia, suggesting new investment strategies.

Willie et al. (2025) studied this question.

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