Econometric Analysis of the Determinants of China’s FDI in Oil/Minerals Exporting Countries in Africa

Gold, K.L., Rasiah, R., Kian Teng, K. 2019. Econometric analysis of the determinants of China’s Foreign Direct Investment in oil/minerals exporting countries in Africa. Journal of Applied Economic Sciences, Volume XIV, Summer, 2(64): 454 - 467. DOI:10.14505/jaes.v14.2(64).15

15 Pages Posted: 15 Jun 2020

See all articles by Gold Kafilah

Gold Kafilah

University of Malaya

Rajah Rasiah

University of Malaya

Date Written: December 10, 2018

Abstract

The unprecedented rise in China’s Foreign Direct Investment (FDI) stocks to resource-endowed countries in Africa from the beginning of the new millennium has generated considerable debate on the motive. Most of the existing studies on the determinants of China’s bilateral foreign investment in Africa are qualitative. While the quantitative analyses studies are limited due to data availability. We use longer time span disaggregate FDI data to empirically examine the extent to which exports, institutional quality and other explanatory variables determine China’s FDI in oil/minerals exporting African countries. We find out that, of all the exports variables, oil and agricultural exports, facilitate most of China’s foreign investment. Moreover, the institutional quality variable (political instability) has an overall negative and significant impact on FDI. This indicates that a strong political stable region has a discernible effect on Chinese FDI.

Suggested Citation

Kafilah, Gold and Rasiah, Rajah, Econometric Analysis of the Determinants of China’s FDI in Oil/Minerals Exporting Countries in Africa (December 10, 2018). Gold, K.L., Rasiah, R., Kian Teng, K. 2019. Econometric analysis of the determinants of China’s Foreign Direct Investment in oil/minerals exporting countries in Africa. Journal of Applied Economic Sciences, Volume XIV, Summer, 2(64): 454 - 467. DOI:10.14505/jaes.v14.2(64).15, Available at SSRN: https://ssrn.com/abstract=3605733

Gold Kafilah (Contact Author)

University of Malaya ( email )

Kuala Lumpur, Wilayah Persekutuan 50603
University of Malaya (UM)
Kuala Lumpur, Wilayah Persekutuan 50603
Malaysia

Rajah Rasiah

University of Malaya ( email )

University of Malaya
Faculty of Economics and Administration
Kuala Lumpur, Wilayah Persekutuan 50603
Malaysia
60379673606 (Phone)
60379673719 (Fax)

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