Working Paper
93

Comparative Effects of Foreign Direct Investment from China and Other Sources on Africa’s Economic Growth

Date Published

Jan 27, 2020

Authors

Marvelous Ngundu, Nicholas Ngepah

Publisher

Citation

Ngundu, Marvelous and Ngepah, Nicholas. 2020. Comparative Effects of Foreign Direct Investment from China and Other Sources on Africa’s Economic Growth. AidData Working Paper #93. Williamsburg, VA: AidData at William & Mary.

Announcement

This study examines comparatively the growth effects of FDI from China, EU, US and the rest of Asia in sub-Saharan Africa for the period (2003-2012). We develop theoretical arguments from the existing literature to show that differences in FDI data sources, methodological and econometric approaches may be part of the explanation for mixed findings of previous empirical studies, precisely on the growth effects of Chinese FDI in Africa. Our results using the 2SLS estimator indicate a significantly negative direct impact of Chinese FDI on growth in sub-Saharan Africa while the impact of other FDI sources is statistically insignificant.

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