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Foreign Direct Investment from China, India and South Africa in Sub-Saharan Africa: A New or Old Phenomenon?

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Author Info
Henley, John
Kratzsch, Stefan
Kulur, Mithat
Tandogan, Tamer
Abstract

The burgeoning literature on outward foreign direct investment from emerging markets has largely focused on analysing the motives of investors as reported by parent companies. This paper, instead, focuses on firm-level investments originating from China, India or South Africa in fifteen host countries in sub-Saharan Africa (SSA). The analysis is based on a sub-set of firms drawn from the overall sample of 1,216 foreign-owned firms participating in the UNIDO Africa Foreign Investor Survey, carried out in 2005. The sample of investments originating from China, India and South Africa is analysed in terms of firm characteristics, past and forecast performance in SSA over three years and management?s perception of ongoing business conditions. Comparisons are made with foreign investors from the North. The paper concludes that while investors in SSA from the three countries are primarily using their investment to target specific markets, they are largely operating in different sub-sectors. While there appear to be specific features that firms from a given country of origin share, there are no obvious operating-level features they all share apart from market seeking.

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Paper provided by World Institute for Development Economic Research (UNU-WIDER) in its series Working Papers with number RP2008/24.

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Length: 28 pages
Date of creation: 2008
Date of revision:
Handle: RePEc:unu:wpaper:rp2008-24

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Related research
Keywords: South-South FDI; market-seeking; sub-Saharan Africa; China; India; South Africa;

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  1. Michael A Witt & Arie Y Lewin, 2007. "Outward foreign direct investment as escape response to home country institutional constraints," Journal of International Business Studies, Palgrave Macmillan Journals, vol. 38(4), pages 579-594, July. [Downloadable!] (restricted)
  2. John S Henley, 2004. "Chasing the dragon: accounting for the under-performance of India by comparison with China in attracting foreign direct investment," Journal of International Development, John Wiley & Sons, Ltd., vol. 16(7), pages 1039-1052. [Downloadable!]
  3. Morisset, Jacques, 2000. "Foreign direct investment in Africa : policies also matter," Policy Research Working Paper Series 2481, The World Bank. [Downloadable!]
  4. Ramana Nanda & Tarun Khanna, 2007. "Diasporas and Domestic Entrepreneurs: Evidence from the Indian Software Industry," Harvard Business School Working Papers 08-003, Harvard Business School, revised Feb 2009. [Downloadable!]
  5. Igor Filatotchev & Roger Strange & Jenifer Piesse & Yung-Chih Lien, 2007. "FDI by firms from newly industrialised economies in emerging markets: corporate governance, entry mode and location," Journal of International Business Studies, Palgrave Macmillan Journals, vol. 38(4), pages 556-572, July. [Downloadable!] (restricted)
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