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China's Outward Direct Investment in Africa

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  • Yin‐Wong Cheung
  • Jakob de Haan
  • Xingwang Qian
  • Shu Yu

Abstract

We examine the empirical determinants of China's outward direct investment (ODI) in Africa using an officially approved ODI dataset and a relatively new OECD-IMF format ODI dataset. China's ODI is found responding to the canonical economic determinants that include the market seeking motive, the risk factor, and the resources seeking motive. It is also affected by the intensity of trade ties and the presence of China¡¦s contracted projects. A host country's natural resources have an impact on China's decision on how much to invest in the country rather than on whether to invest in the country or not. China's drive for Africa's natural resources is mainly a recent phenomenon and, probably, became prominent after the "Going Global" policy adopted in 2002.
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Suggested Citation

  • Yin‐Wong Cheung & Jakob de Haan & Xingwang Qian & Shu Yu, 2012. "China's Outward Direct Investment in Africa," Review of International Economics, Wiley Blackwell, vol. 20(2), pages 201-220, May.
  • Handle: RePEc:bla:reviec:v:20:y:2012:i:2:p:201-220
    DOI: j.1467-9396.2012.01017.x
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    File URL: http://hdl.handle.net/10.1111/j.1467-9396.2012.01017.x
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    References listed on IDEAS

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    1. repec:hal:journl:dumas-00903799 is not listed on IDEAS
    2. Didier, Tatiana & Llovet, Ruth & Schmukler, Sergio L., 2017. "International financial integration of East Asia and Pacific," Journal of the Japanese and International Economies, Elsevier, vol. 44(C), pages 52-66.
    3. Matthias Busse & Ceren Erdogan & Henning Mühlen, 2016. "China's Impact on Africa – The Role of Trade, FDI and Aid," Kyklos, Wiley Blackwell, vol. 69(2), pages 228-262, May.
    4. repec:eee:chieco:v:44:y:2017:i:c:p:241-252 is not listed on IDEAS
    5. Jaya Prakash Pradhan, 2011. "Emerging Multinationals: A Comparison of Chinese and Indian Outward Foreign Direct Investment," Institutions and Economies (formerly known as International Journal of Institutions and Economies), Faculty of Economics and Administration, University of Malaya, vol. 3(1), pages 113-148, April.
    6. repec:fdi:wpaper:1785 is not listed on IDEAS
    7. Sosa Andrés, Maximiliano & Nunnenkamp, Peter & Busse, Matthias, 2013. "What drives FDI from non-traditional sources? A comparative analysis of the determinants of bilateral FDI flows," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy (IfW), vol. 7, pages 1-53.
    8. Christian Milelli & Alice Nicole Sindzingre, 2013. "Chinese Outward Foreign Direct Investment in Developed and Developing Countries: Converging Characteristics?," Post-Print hal-01411752, HAL.
    9. Süssmuth, Bernd & Gawellek, Bastian & Lyu, Jingjing, 2015. "Did Chinese Outward Activity Attenuate or Aggravate the Great Recession in Developing Countries?," Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 112994, Verein für Socialpolitik / German Economic Association.
    10. Fuchs, Andreas, 2016. "China’s Economic Diplomacy and the Politics-Trade Nexus," Working Papers 0609, University of Heidelberg, Department of Economics.
    11. Austin Strange & Bradley Parks & Michael J. Tierney & Andreas Fuchs & Axel Dreher & Vijaya Ramachandran, 2013. "China’s Development Finance to Africa: A Media-Based Approach to Data Collection," Working Papers 323, Center for Global Development.
    12. Thorsten Beck & Samuel Munzele Maimbo & Issa Faye & Thouraya Triki, 2011. "Financing Africa : Through the Crisis and Beyond," World Bank Publications, The World Bank, number 2355.
    13. repec:eee:ememar:v:33:y:2017:i:c:p:1-18 is not listed on IDEAS
    14. Shujie Yao & Pan Wang, "undated". "Has China Displaced the Outward Investments of OECD Countries?," Discussion Papers 12/10, University of Nottingham, GEP.
    15. repec:fdi:wpaper:1786 is not listed on IDEAS
    16. Yao, Shujie & Wang, Pan, 2014. "Has China displaced the outward investments of OECD countries?," China Economic Review, Elsevier, vol. 28(C), pages 55-71.
    17. Catherine Co, 2014. "Chinese contractors in developing countries," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 150(1), pages 149-171, February.
    18. Bastian Gawellek & Jingjing Lyu & Bernd Süssmuth, 2016. "Did Chinese Outward Activity Attenuate or Aggravate the Great Recession in Developing Countries?," CESifo Working Paper Series 5735, CESifo Group Munich.
    19. Omer Gokcekus & Yui Suzuki, 2016. "Mixing Washington Consensus With Beijing Consensus And Corruption In Africa," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 61(02), pages 1-14, June.

    More about this item

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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