China's Impact on Africa – The Role of Trade, FDI and Aid

33 Pages Posted: 17 Apr 2014

See all articles by Matthias Busse

Matthias Busse

Ruhr-University Bochum

Ceren Erdogan

Ruhr Universität Bochum

Henning Mühlen

University of Hohenheim

Multiple version iconThere are 2 versions of this paper

Date Written: April 17, 2014

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.

Keywords: China, Sub-Saharan Africa, Trade, FDI, Foreign Aid, Economic Growth, South-South Cooperation

JEL Classification: F14, F23, F35, O47

Suggested Citation

Busse, Matthias and Erdogan, Ceren and Mühlen, Henning, China's Impact on Africa – The Role of Trade, FDI and Aid (April 17, 2014). Available at SSRN: https://ssrn.com/abstract=2426106 or http://dx.doi.org/10.2139/ssrn.2426106

Matthias Busse (Contact Author)

Ruhr-University Bochum ( email )

Faculty of Management and Economics, GC 3/145
D-44780 Bochum, DE 44780
Germany

Ceren Erdogan

Ruhr Universität Bochum ( email )

Universitätsstraße 150
Bochum, NRW 44780
Germany

Henning Mühlen

University of Hohenheim ( email )

Institute of Economics (520E)
Schloss Hohenheim
Stuttgart, 70593
Germany

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