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Private Chinese Investment in Ethiopia: Determinants and Location Decisions

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  • Mebratu Seyoum
  • Jihong Lin

Abstract

Using a unique firm‐level data from the World Bank Survey on Chinese outbound direct investment conducted in Ethiopia in 2012, this study examines the determinants and location decisions of private Chinese investment in Ethiopia. Principal components factor analysis shows that (i) Chinese firms invest in Ethiopia to take advantage of their ownership advantages, (ii) market access motives are influential in investment location decision‐making and (iii) host government incentive packages towards inward foreign direct investment affect their location decisions, albeit less influential than other factors. These results remain robust when we controlled for two separate clusters of Chinese firms. Copyright © 2014 John Wiley & Sons, Ltd.

Suggested Citation

  • Mebratu Seyoum & Jihong Lin, 2015. "Private Chinese Investment in Ethiopia: Determinants and Location Decisions," Journal of International Development, John Wiley & Sons, Ltd., vol. 27(7), pages 1223-1242, October.
    • Handle: RePEc:wly:jintdv:v:27:y:2015:i:7:p:1223-1242
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    Cited by:

    1. Adugna Lemi & Liyan Liu & Ian A. Wright, 2021. "Location choice determinants of Chinese and US firms in Africa: Does spatial interdependence play a role?," The World Economy, Wiley Blackwell, vol. 44(10), pages 2966-2997, October.
    2. Amsalu K. Addis & Simplice Asongu & Zhu Zuping & Hailu Kendie Addis & Eshetu Shifaw, 2020. "Chinese and Indian investment in Ethiopia: infrastructure for ‘debt-trap diplomacy’ exchange and the land grabbing approach," International Journal of Emerging Markets, Emerald Group Publishing Limited, vol. 16(6), pages 998-1025, June.
    3. Ilan Alon & John Anderson & Ziaul Haque Munim & Alice Ho, 2018. "A review of the internationalization of Chinese enterprises," Asia Pacific Journal of Management, Springer, vol. 35(3), pages 573-605, September.
    4. Chengchun Li & Yun Luo & Glauco Vita, 2020. "Institutional difference and outward FDI: evidence from China," Empirical Economics, Springer, vol. 58(4), pages 1837-1862, April.

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