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

Marvellous Ngundu; Nicholas Ngepah

doi:10.1177/0973801020953399

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

Marvellous Ngundu
, Nicholas Ngepah

School of Economics

University of Johannesburg

Research output: Contribution to journal › Article › peer-review

4 Citations (Scopus)

Abstract

This study examines comparatively the growth effects of FDI from China, the European Union, the 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 bilateral FDI data compiled by UNCTAD, the FDI-augmented version of the Solow growth model and 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.

Original language	English
Pages (from-to)	382-408
Number of pages	27
Journal	Margin
Volume	14
Issue number	4
DOIs	https://doi.org/10.1177/0973801020953399
Publication status	Published - 1 Nov 2020

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

SDG 8 Decent Work and Economic Growth
SDG 10 Reduced Inequalities
SDG 17 Partnerships for the Goals

Keywords

Africa
China
Economic Growth
Foreign Direct Investment

ASJC Scopus subject areas

Development
Economics, Econometrics and Finance (all)

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abstract = "This study examines comparatively the growth effects of FDI from China, the European Union, the 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 bilateral FDI data compiled by UNCTAD, the FDI-augmented version of the Solow growth model and 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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AU - Ngepah, Nicholas

PY - 2020/11/1

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N2 - This study examines comparatively the growth effects of FDI from China, the European Union, the 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 bilateral FDI data compiled by UNCTAD, the FDI-augmented version of the Solow growth model and 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.

AB - This study examines comparatively the growth effects of FDI from China, the European Union, the 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 bilateral FDI data compiled by UNCTAD, the FDI-augmented version of the Solow growth model and 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.

KW - Africa

KW - China

KW - Economic Growth

KW - Foreign Direct Investment

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DO - 10.1177/0973801020953399

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JO - Margin

JF - Margin

IS - 4

ER -

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

Abstract

UN SDGs

Keywords

ASJC Scopus subject areas

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