Econometric Analysis of the Determinants of China’s Foreign Direct Investment in Oil/Minerals Exporting Countries in Africa

The unprecedented rise in China’s Foreign Direct Investment (FDI) stocks to resource-endowed countries in Africa from the beginning of the new millennium has generated considerable debate on the motive. Most of the existing studies on the determinants of China’s bilateral foreign investment in Afric...

Full description

Saved in:
Bibliographic Details
Published inJournal of Applied Economic Sciences (JAES) Vol. XIV; no. 64; pp. 455 - 467
Main Authors GOLD, Kafilah Lola, Rasiah, Rajah, KIAN TENG, Kwek
Format Journal Article
LanguageEnglish
Published ASERS Publishing 2019
Subjects
Business Economy / Management
Economy
International relations/trade
Supranational / Global Economy
disaggregate exports
China
Africa
foreign direct investment
institutional driver
Online AccessGet full text

Cover

More Information
Summary:The unprecedented rise in China’s Foreign Direct Investment (FDI) stocks to resource-endowed countries in Africa from the beginning of the new millennium has generated considerable debate on the motive. Most of the existing studies on the determinants of China’s bilateral foreign investment in Africa are qualitative. While the quantitative analyses studies are limited due to data availability. We use longer time span disaggregate FDI data to empirically examine the extent to which exports, institutional quality and other explanatory variables determine China’s FDI in oil/minerals exporting African countries. We find out that, of all the exports variables, oil and agricultural exports, facilitate most of China’s foreign investment. Moreover, the institutional quality variable (political instability) has an overall negative and significant impact on FDI. This indicates that a strong political stable region has a discernible effect on Chinese FDI.
ISSN:1843-6110
2393-5162