Document Type
Article
Publication Date
4-1-2014
Abstract
This paper examines the impacts of foreign direct investment, as well as China’s FDI on GDP growth of Sub-Saharan African countries from a macroeconomic perspective. By using the data from 44 Sub-Saharan African countries from 2003-2010, our GMM results show that neither China’s FDI nor FDI net inflow in SSA has significant effect on economic growth of SSA countries. The possible explanations about the insignificant results include crowding out effect of China’s FDI on domestic investment, the declining in outward FDI in traditional sectors and rising in service sector which ignored in the current model, and the types of sectors in which Chinese FDI has been concentrated. We also test other economic growth determinants of SSA countries based on growth accounting theory. Our results also show that capital stock per labor has persistent and significant positive impacts on SSA’s growth. In addition, capital per worker is another important determinant in growth.
Published In
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Publication Title
International Journal of Emerging Markets
ISSN
1746-8810
DOI
http://dx.doi.org/10.1108/IJoEM-10-2013-0171
Comments
Published originally as "Does Chinese Direct Investment Affect Sub-Saharan African Growth?" in International Journal of Emerging Markets 9, no. 2 (2014): 257-275.