The Impact of China, the EU, and the US on Africa through the Lens of Output Growth and FDI

Marvellous Ngundu, Nicholas Ngepah

Research output: Contribution to journalArticlepeer-review

2 Citations (Scopus)


This study uses a vector of FDI-weighted real gross domestic product (GDP) growth rates as proxy for the output growth of China, the European Union (EU), and the United States (US). Using a two-stage least squares estimator over a sample of 42 sub-Saharan African countries for the period 2003-2012, our findings reveal that only the EU's output spillovers have a significant impact on sub-Saharan Africa's growth: A 1% increase (decrease) in the EU's output growth can lead to a 0.02% increase (decrease) in sub-Saharan Africa's real GDP per capita. The results obtained from the panel threshold regression analysis indicate that this linkage is not conditional on the availability of natural resources, unlike the output spillovers from the US and China, which bear a positive impact only in countries with resource rents of at least 24.3% and 24.1%, respectively. These are mostly oil-abundant countries, implying that China's motive for natural resources in Africa is not different from that of the US. While the resource rents threshold level of 24.3% can serve as the benchmark for natural resource management policies to benefit from both China and the US output spillovers, a diversified FDI is also encouraged to minimize the risk associated with the resource growth paradigm.

Original languageEnglish
Pages (from-to)548-568
Number of pages21
JournalFrontiers of Economics in China
Issue number3
Publication statusPublished - Sept 2021
Externally publishedYes


  • China's impact on Africa
  • European Union (EU)
  • Foreign direct investments (FDI)
  • Output growth
  • Panel threshold regression (PTR)
  • Resource rents
  • Spillovers
  • Sub-Saharan Africa
  • United States (US)

ASJC Scopus subject areas

  • Economics and Econometrics


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