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The Dynamics of Chinese FDI in Africa: A Case Study Algeria

Author

Listed:
  • Mohammed Salah Abdessultane
  • Youlin Zhao
  • Bakir Hami

Abstract

This study employs a Seasonal Autoregressive Integrated Moving Average with Exogenous Variables (SARIMAX) model to examine the determinants, temporal patterns, and projected trajectories of Chinese Foreign Direct Investment (FDI) flows to Algeria over the period 2003-2021. Chinese capital investments have emerged as a critical factor in Algeria's economic transformation, with concentrated activity in construction, energy extraction, and infrastructure development sectors. Utilizing quarterly time-series data derived from national statistical agencies and international financial institutions, this research models the dynamic relationship between Chinese FDI inflows and key macroeconomic determinants, including international oil price volatility, exchange rate fluctuations, and bilateral trade volumes. The empirical analysis incorporates advanced econometric techniques to capture seasonal variations and external shocks affecting investment patterns. Through ex-ante forecasting methodologies, the study projects future FDI trajectories while identifying primary explanatory variables that influence investment decisions. The econometric findings provide empirical evidence for policymakers seeking to develop strategic frameworks for attracting sustainable and sectorally diversified foreign investment portfolios. The research contributes to the broader literature on South-South investment flows and offers practical insights for enhancing bilateral economic cooperation mechanisms between China and Algeria.

Suggested Citation

  • Mohammed Salah Abdessultane & Youlin Zhao & Bakir Hami, 2025. "The Dynamics of Chinese FDI in Africa: A Case Study Algeria," Business Management and Strategy, Macrothink Institute, vol. 16(2), pages 188-210, December.
    • Handle: RePEc:mth:bmsmti:v:16:y:2025:i:2:p:188-210
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    References listed on IDEAS

    as
    1. Auty, Richard M., 1994. "Industrial policy reform in six large newly industrializing countries: The resource curse thesis," World Development, Elsevier, vol. 22(1), pages 11-26, January.
    2. Daniel N Mlambo & Victor H Mlambo & Mandla A Mubecua, 2018. "The Rise of Chinese Investments in Africa: For Whose Benefit?," Journal of Economics and Behavioral Studies, AMH International, vol. 10(4), pages 81-87.
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    More about this item

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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