Abstract:
Abstract
The literature has overlooked the significance of business cycle synchronization in sustainable trade
development, particularly with regard to trade-adjusted carbon emissions. Further, how capital mobility affect
the nexus between business cycle synchronization and sustainable trade development is an area that is yet to be
explored. This paper examines the role of capital mobility in the nexus between business cycle synchronization
and sustainable trade development using the panel corrected standard errors model in 30 African economies for
the period 2006–2020, thus addressing the gaps in the previous studies. We concluded that: First, the direct
effects of business cycle synchronization worsen sustainable trade development in Africa. Second, capital
mobility promotes sustainable trade development in Africa. Third, capital mobility may be a viable instrument
to mitigating the detrimental effects of synchronized business cycles on the sustainable trade development in
Africa. Fourth, our research contributes to the extant literature by determining the threshold at which capital
mobility can affect the association between synchronized business cycles and sustainable trade growth. Fifth,
our study revealed that business cycle synchronization and capital mobility have a causal relationship with
sustainable trade development in Africa. The concluding remarks section includes policy implications.
