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The Impact of China’s “Stadium Diplomacy” on Local Economic Development in Sub-Saharan Africa

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  • Lindlacher Valentin
  • Gustav Pirich

Abstract

This study investigates the economic impact of China’s “stadium diplomacy” in Sub-Saharan Africa. Exploiting the staggered timing of the construction in a difference-in-differences framework, we analyze the effect of Chinese-built and financed stadiums on local economic development. Employing nighttime light satellite data, we provide both an aggregate and spatially disaggregated assessment of these investments. We find that a stadium’s city nighttime light intensity increases by 25 percent, on average, after stadium completion. The stadium’s direct surrounding increases by 34 percent, on average, in its nighttime light activity. The effects can be attributed to the stadiums but are not only visible close to the stadium’s location. The effect remains strong when controlling for other local Chinese investments. Thus, we find evidence for beneficial effects of Chinese-built and financed stadiums on local economic development in Sub-Saharan Africa, contrasting with the widely held notion that China’s development finance projects constitute “white elephants”.

Suggested Citation

  • Lindlacher Valentin & Gustav Pirich, 2024. "The Impact of China’s “Stadium Diplomacy” on Local Economic Development in Sub-Saharan Africa," CESifo Working Paper Series 10893, CESifo.
    • Handle: RePEc:ces:ceswps:_10893
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    References listed on IDEAS

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    More about this item

    Keywords

    stadium diplomacy; regional development; nighttime light; local public infrastructure; Sub-Saharan Africa;
    All these keywords.

    JEL classification:

    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa
    • R53 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Public Facility Location Analysis; Public Investment and Capital Stock
    • Z20 - Other Special Topics - - Sports Economics - - - General

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