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China's Impact on Africa - the Role of Trade, FDI and Aid

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  • Busse, Matthias
  • Erdogan, Ceren
  • Muehlen, Henning

Abstract

We investigate the impact of Chinese activities in sub-Saharan African countries with respect to the growth performance of economies in that region. Using a Solow-type growth model and panel data for the period 1991 to 2011, we find that African economies that export natural resources have benefited from positive terms-of-trade effects. In addition, there is evidence for displacement effects of African firms due to competition from China. Chinese foreign investment and aid in Africa does not have an impact on growth.

Suggested Citation

  • Busse, Matthias & Erdogan, Ceren & Muehlen, Henning, 2014. "China's Impact on Africa - the Role of Trade, FDI and Aid," IEE Working Papers 206, Institut fuer Entwicklungsforschung und Entwicklungspolitik, Ruhr-Universitaet Bochum.
  • Handle: RePEc:bom:ieewps:206
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    1. repec:eee:chieco:v:44:y:2017:i:c:p:241-252 is not listed on IDEAS
    2. repec:eee:wdevel:v:102:y:2018:i:c:p:243-261 is not listed on IDEAS
    3. repec:eee:ememar:v:33:y:2017:i:c:p:1-18 is not listed on IDEAS

    More about this item

    Keywords

    China; Sub-Saharan Africa; Trade; FDI; Foreign aid; Economic growth; South-south cooperation;

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F35 - International Economics - - International Finance - - - Foreign Aid
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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