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The Impacts of Chinese FDI and China–Africa Trade on Economic Growth of African Countries: The Role of Institutional Quality

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  • Miao Miao

    (School of Economics and Management, Southwest Jiaotong University, Chengdu 610031, China)

  • Qiaoqi Lang

    (School of Economics and Management, Southwest Jiaotong University, Chengdu 610031, China)

  • Dinkneh Gebre Borojo

    (School of Economics and Management, Southwest Jiaotong University, Chengdu 610031, China)

  • Jiang Yushi

    (School of Economics and Management, Southwest Jiaotong University, Chengdu 610031, China
    Service Science and Innovation Key Laboratory of Sichuan Province, Chengdu 610031, China)

  • Xiaoyun Zhang

    (School of Economics and Management, Southwest Jiaotong University, Chengdu 610031, China)

Abstract

While there is a consensus on the expanding importance of the China–Africa economic relationship, there is much more debate on how to portray the relationship. Thus, this study is aimed to examine the impacts of the China–Africa trade and Chinese foreign direct investment (FDI) on the growth of African countries controlling the mediating role of institutional quality. The two-step system Generalized method of moments (GMM) model is applied using robust data for the period of 2003–2017. Drawing on complementary theoretical perspectives, this study took into account the conditional effect of China–Africa trade and Chinese FDI subject to the institutional quality of African countries and the interdependence of China–Africa trade and Chinese FDI to African countries. The benign impacts of the China–Africa trade and Chinese FDI on economic growth to African countries remain contingent upon appropriate policy action to improve the institutional quality of African countries and the synergies between the China–Africa trade and Chinese FDI to African countries.

Suggested Citation

  • Miao Miao & Qiaoqi Lang & Dinkneh Gebre Borojo & Jiang Yushi & Xiaoyun Zhang, 2020. "The Impacts of Chinese FDI and China–Africa Trade on Economic Growth of African Countries: The Role of Institutional Quality," Economies, MDPI, vol. 8(3), pages 1-20, June.
    • Handle: RePEc:gam:jecomi:v:8:y:2020:i:3:p:53-:d:377840
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