Does regional economic integration attract more FDI? Focused on comparison among continents

We suppose that the FDI inflow effect of regional integration varies across continents because of their different initial institutional and geographical conditions. If, for instance, a landlocked country participates in a regional integration, it is likely to benefit more than the non-landlocked. Sub-Saharan Africa is the region where institutional quality is the poorest and landlocked countries are concentrated. Therefore, we can expect that regional integrations in Sub-Saharan Africa will create a stronger FDI inflow effect than elsewhere. This study tests this hypothesis by using the data over a period of 25 years from 1984 to 2008 in three continents, that is, East Asia, Latin America, and Sub-Saharan Africa. The results show that regional integration in Sub-Saharan Africa creates the strongest FDI attraction effect to support our hypothesis. The results imply that a regional integration is more desirable in Sub-Saharan Africa because it has more adverse institutional and geographical conditions.