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Working paper

WP142: Ethnicity and individual attitudes towards international investors: Survey evidence from Sub-Saharan Africa

15 Apr 2015
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Scholarly literature has recently advanced our understanding of why citizens prefer or reject free trade. Empirical results based on OECD countries confirm the Heckscher-Ohlin model of trade. The paper shifts the focus towards Sub-Saharan Africa and tests the determinants of individual support toward foreign investors. It proposes a model that explains why foreign direct investment reinforces policy making along ethnic cleavages and predicts that individual trade attitudes are mainly formed by individuals’ politically relevant ethnic group identity. Using data from 19 countries and over 15000 respondents of Afrobarometer’s fourth round the paper presents evidence for the role of ethnicity as a determinant for individual support for foreign investors. The results do not confirm the predictions of the Heckscher-Ohlin model.