This study assesses the threshold impact of public investment, private investment, and public-private partnerships (PPPs) on enhancing the international trade capabilities of emerging economies in Sub-Saharan Africa (SSA).
The study employed the system generalized method of moment (SGMM) and splitting threshold estimation technique on annual panel data from the top 6 emerging economies in SSA between the period 1990 to 2022.
The study revealed that private investment, public investment, and PPP investment all have a positive impact on trade based on the SGMM estimations. However, the threshold regression analysis reveals that private investments boost trade significantly below a threshold but turn negative beyond it, while public and PPP investments positively impact trade only above a certain threshold, with low levels of these investments being detrimental to trade in emerging economies within SSA.
The findings imply that policymakers in SSA should carefully calibrate private investment incentives, strategically commit to substantial public projects, enhance governance of PPP initiatives, and implement robust monitoring and evaluation frameworks to maximize the developmental impact and ensure sustainable trade.
The novelty of this study stems from its integration of public, private and PPE investment models within a single analytical framework to assess their collective impact on international trade, focusing on the unique context of emerging economies in SSA.
