Spatial panel econometric analysis of some selected macroeconomic variables

Abstract

This study employs spatial panel econometric analysis to examine the interdependencies among key macroeconomic variables, including the consumer price index (CPI), foreign direct investment (FDI), interest rates, exchange rates, and gross domestic product (GDP) across African countries, with a focus on spatial spillovers and regional heterogeneity. Utilizing fixed effects and generalized method of moments (GMM) estimators, the research reveals significant spatial autocorrelation (Rho = 0.1976), confirming the presence of cross-border economic spillovers. The results highlight stark disparities: resource-rich nations, such as Equatorial Guinea and South Africa, exhibit strong positive GDP effects, while conflictaffected countries, including the Democratic Republic of Congo and Niger, show pronounced negative impacts. Trade balance emerges as the only significant economic driver (coefficient = 5.72– 7.08, p < 0.01), whereas CPI, FDI, interest rates, and exchange rates are statistically insignificant. The study underscores the necessity of spatial econometric frameworks to address unobserved regional heterogeneity and policy spillovers, advocating for coordinated regional strategies to mitigate disparities and leverage spatial interdependencies.