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
Abstract
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.