TITLE:
Private Investment Effect on Exports Diversification: Evidences from Sub-Saharan African Countries
AUTHORS:
Nodjadoum Tolnan, Jean Hugues Nlom, Alexandre Turpin Iroume A. Bouebe, Charles Alain Bita
KEYWORDS:
Private Investment, Export Diversification, SGMM, SSA
JOURNAL NAME:
Technology and Investment,
Vol.17 No.3,
August
12,
2026
ABSTRACT: This article aims to evaluate how private investments (PIs) affect exports horizontal diversification (DH) in 41 Sub-Saharan African (SSA) countries over the period 2009-2022. To achieve this, the method of moments generalized in system is applied on a dynamic panel data to address the potential endogeneity issues and providing robust outcomes. Findings are fivefold: First, IPs has a positive and significant impact exports horizontal diversification. Particularly, 10% increase in PIs increases leads to improve by 0.428% the DH. Second, IP-DH nexus is appeared as an inverted U-sharped, meaning that there is a IPs’ threshold from where exports horizontal diversification begin to be mitigated. Third, by addressing the heterogeneity issues, findings remain valid for both rich-resource countries and middle/higher income countries sample, contrary to non-natural resources and lower income countries samples. Four, by looking for the transmission channels, findings suggest that foreign direct investments, economic growth, political stability, lead to mitigate the positive effect of IP on DH. Then, the adverse direct effect observed from a certain threshold of IP would be related to the relatively higher concentration of IP inflows and economic growth on extractive sectors, lower institutional qualities; all of these lead to reduce the potential of economic diversification and global trade participation of SSA. Therefore, the SSA’s governments would be wise to introduce a technical training policy that involves investing in training centres aligned to the needs of the market and to incorporate modern technologies to promote practical learning related to industrialization and local requirements.