IDEAS home Printed from https://ideas.repec.org/a/bdu/ijecon/v10y2025i2p35-58id3458.html
   My bibliography  Save this article

Impact of China’s Foreign Direct Investment (FDI) on EAC’s Economic Growth (2003-2022): An Econometric Analysis

Author

Listed:
  • Clemence Abadata
  • Tian Ze
  • Abban Priscilla Nyamekye
  • Paulette Serwaa Amaniampong

Abstract

Purpose: This study examines the impact of China's Foreign Direct Investment (FDI) on economic growth within the East African Community (EAC) from 2003 to 2022. Methodology: Employing econometric techniques, including the Error Correction Model (ECM) and Ordinary Least Squares (OLS) regression, the research explores the dynamic relationships between Gross Domestic Product (GDP) and key determinants such as Gross Domestic Savings (GDS), Gross Capital Formation (GCF), Natural Resources (NR), and Trade Openness (TO). Findings: The results demonstrate that FDI, GDS, GCF, and TO significantly contribute to GDP growth, while NR exhibits a negative relationship with GDP. This negative effect may stem from the resource curse, where an overreliance on natural resources leads to economic volatility, weakens institutional frameworks, and diverts focus from other sectors. Additionally, fluctuations in global commodity prices can exacerbate economic instability. Unique Contribution to Theory, Practice and Policy: The study underscores the critical role of effective policy formulation and institutional capacity building to optimize the benefits of Chinese FDI, while addressing potential risks related to over-reliance and dependency.

Suggested Citation

  • Clemence Abadata & Tian Ze & Abban Priscilla Nyamekye & Paulette Serwaa Amaniampong, 2025. "Impact of China’s Foreign Direct Investment (FDI) on EAC’s Economic Growth (2003-2022): An Econometric Analysis," International Journal of Economics, IPRJB, vol. 10(2), pages 35-58.
    • Handle: RePEc:bdu:ijecon:v:10:y:2025:i:2:p:35-58:id:3458
    as

    Download full text from publisher

    File URL: https://iprjb.org/journals/index.php/IJECON/article/view/3458
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bdu:ijecon:v:10:y:2025:i:2:p:35-58:id:3458. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: journals@iprjb.org (email available below). General contact details of provider: https://iprjb.org/journals/index.php/IJECON/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.