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.
