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An empirical analysis of Chinese outward foreign direct investment in Africa

Andrew G. Ross (School of Management, Edinburgh Napier University, Edinburgh, UK)

Journal of Chinese Economic and Foreign Trade Studies

ISSN: 1754-4408

Article publication date: 2 February 2015

Abstract

Purpose

The purpose of this paper is to identify and analyse determinants of Chinese outward foreign direct investment (OFDI) into a number of African countries for the period 2003-2012.

Design/methodology/approach

A series of panel data models are used to estimate the determinants of Chinese OFDI into eight African countries: Nigeria, South Africa, Zambia, Ghana, Kenya, Algeria, Egypt and the Sudan.

Findings

Results highlighted that Chinese investment in African countries is driven by access to natural resources, and factors related to infrastructure quality and the regulatory environment enforced by host governments.

Originality/value

To the best of the authors’ knowledge, this is one of the first papers to identify empirical determinants of Chinese OFDI in Africa and it contributes from two perspectives. Firstly, it identifies drivers behind Chinese OFDI, but also importantly from the African perspective helps understand the reasons that attract investment from one of the world’s largest investors into one of the world’s poorest regions, given the emphasis that is placed on foreign direct investment today as an instrument of growth and development.

Keywords

Citation

Ross, A.G. (2015), "An empirical analysis of Chinese outward foreign direct investment in Africa", Journal of Chinese Economic and Foreign Trade Studies, Vol. 8 No. 1, pp. 4-19. https://doi.org/10.1108/JCEFTS-12-2014-0025

Publisher

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Emerald Group Publishing Limited

Copyright © 2015, Emerald Group Publishing Limited