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Does Green Overseas Investment Improve Public Perception in Host Countries? Evidence from Chinese Energy Engagement in 32 African Countries

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  • Christoph Nedopil

    (Griffith Asia Institute, Griffith University, Nathan, QLD 4111, Australia
    Green Finance and Development Center, Fanhai International School of Finance (FISF), Fudan University, Shanghai 200437, China)

  • Mengdi Yue

    (Green Finance and Development Center, Fanhai International School of Finance (FISF), Fudan University, Shanghai 200437, China)

Abstract

This study examines whether and how green overseas economic engagement impacts public perception in host countries as a form of soft power. We build an extensive country-level dataset on Chinese bilateral engagement in 32 African countries from 2015 to 2019 and use a fixed-effect model. We find that increased investment in green energy improves the average public perception of China. In contrast, for non-green energy investment (like coal, gas, and oil), which might also be considered as contributing to economic and employment growth, we did not find such effects. The results indicate that green economic engagement has positive non-monetary returns on the macro-scale and that by taking environmental considerations into investment decision-making, long-term bilateral relationships can be positively impacted.

Suggested Citation

  • Christoph Nedopil & Mengdi Yue, 2024. "Does Green Overseas Investment Improve Public Perception in Host Countries? Evidence from Chinese Energy Engagement in 32 African Countries," Sustainability, MDPI, vol. 16(2), pages 1-14, January.
    • Handle: RePEc:gam:jsusta:v:16:y:2024:i:2:p:590-:d:1316093
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    References listed on IDEAS

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    1. Tancrède Voituriez & Wang Yao & Mathias Lund Larsen, 2019. "Revising the ‘host country standard’ principle: a step for China to align its overseas investment with the Paris Agreement," Climate Policy, Taylor & Francis Journals, vol. 19(10), pages 1205-1210, November.
    2. Matthias Busse & José Luis Groizard, 2008. "Foreign Direct Investment, Regulations and Growth," The World Economy, Wiley Blackwell, vol. 31(7), pages 861-886, July.
    3. Humphrey, Chris & Michaelowa, Katharina, 2019. "China in Africa: Competition for traditional development finance institutions?," World Development, Elsevier, vol. 120(C), pages 15-28.
    4. Lukas Wellner & Axel Dreher & Andreas Fuchs & Bradley C. Parks & Austin Strange, 2025. "Can Aid Buy Foreign Public Support? Evidence from Chinese Development Finance," Economic Development and Cultural Change, University of Chicago Press, vol. 73(2), pages 523-578.
    5. Jeffrey D. Sachs & Wing Thye Woo & Naoyuki Yoshino & Farhad Taghizadeh-Hesary, 2019. "Why is Green Finance Important ?," Working Papers id:12983, eSocialSciences.
    6. Blair, Robert A. & Marty, Robert & Roessler, Philip, 2022. "Foreign Aid and Soft Power: Great Power Competition in Africa in the Early Twenty-first Century," British Journal of Political Science, Cambridge University Press, vol. 52(3), pages 1355-1376, July.
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