Altruism or Trade Benefits: What Motive Determines China’s Foreign Aid to African Oil Exporting Countries

Journal of Business Economics Management, 2019

14 Pages Posted: 9 Jul 2020

See all articles by Gold Kafilah

Gold Kafilah

University of Malaya

Rajah Rasiah

University of Malaya

Agboola Yusuf

Yusuf Agboola

Hammed Oluwaseyi Musibau

Tasmanian School of Business and Economics, University of Tasmania, Australia

Murtala Muhammad

University of Malaya (UM)

Date Written: May 16, 2019

Abstract

This paper examines the determinants of China’s financial aid to oil/minerals exporting African countries. By using China’s loan data obtained from the China Africa Research Initiative, Johns Hopkins University and UN-COMTRADE product data classified into oil/minerals, agriculture and manufacturing, this study employ fixed effects, generalised least squares and Pesaran dynamic fixed effects to analyse the motives. The results indicate that oil/minerals are not the motives behind China’s aid to Africa. However, China’s aid is driven by its manufacturing exports, suggesting that aid may be tied to trade. Also, the institutional structure enhances more financial aid to Africa. The findings of this study serve as recommendations for policymakers to improve trade policies that will enhance the sustainability of Africa’s engagement with China.

Keywords: China, Africa, oil, manufacturing, agriculture, aid, institutional structures

JEL Classification: O53, O55, L72, L60, Q17, F35, E02

Suggested Citation

Kafilah, Gold and Rasiah, Rajah and Yusuf, Agboola and Musibau, Hammed Oluwaseyi and Muhammad, Murtala, Altruism or Trade Benefits: What Motive Determines China’s Foreign Aid to African Oil Exporting Countries (May 16, 2019). Journal of Business Economics Management, 2019, Available at SSRN: https://ssrn.com/abstract=3628417

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)

Agboola Yusuf

Yusuf Agboola ( email )

Ilorin, Kwara State 0834
Nigeria

Hammed Oluwaseyi Musibau

Tasmanian School of Business and Economics, University of Tasmania, Australia ( email )

13 Monash St. Mowbay, Launceston
Launceston, TX 7248
Australia
61415388734 (Phone)

Murtala Muhammad

University of Malaya (UM) ( email )

University of Malaya, Faculty of Economics & Admin
Kuala Lumpur, 50603

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