Free zones and manufactured export competitiveness from Africa

Abstract This study analyzes the effect of free zones on the competitiveness of manufactured exports from Africa. Particular interest is devoted to the channels through which free zones affect export competitiveness. The empirical analysis covers a sample of 29 countries for the period 1996–2018. Using panel data techniques, the results show that the free zone has a positive and significant effect on export competitiveness. The main transmission channels identified are foreign direct investment inflow, human capital, and institutional quality. As the main policy implication, policymakers in Africa need to invest more in human capital development and improve the attractiveness of the investment environment as a priority for having productive free zones.