China's investments in Africa: Does investment facilitation in Africa matter?

Xia, Ke and Devadason, Evelyn S. (2021) China's investments in Africa: Does investment facilitation in Africa matter? Contemporary Chinese Political Economy and Strategic Relations, 7 (1). pp. 563-598. ISSN 2410-9681,

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China, through its open policy, has enhanced its cooperation with Africa through outward foreign direct investment (OFDI) in the region's production capacity. Though China's investment prospects in Africa remain vast and diversified, the continent constitutes a small share of the stock of Chinese global OFDI. There is a dearth of research on the relationship between the level of African investment facilitation and the scale of China's investments in the continent. The paper provides a comprehensive measurement of investment facilitation in 19 African countries spanning the 2010 to 2017 period using the entropy weight method. The expanded investment gravity model analyzes the impact of African investment facilitation on China's OFDI in the continent. Investment facilitation levels of most African countries are found to be relatively low, except for South Africa and Morocco. The empirical results support a significant and positive impact of investment facilitation in Africa on China's OFDI. From a disaggregated investment facilitation perspective, the application of information technology is found to be significant for aiding China's investments in Africa. © 2021 Institute of China and Asia-Pacific Studies - National Sun Yat-sen University. All rights reserved.

Item Type: Article
Funders: None
Uncontrolled Keywords: Africa; China; Entropy weight method; Gravity model; Investment facilitation; Outward foreign direct investment
Subjects: H Social Sciences > HF Commerce
Divisions: Faculty of Economics & Administration
Depositing User: Ms Zaharah Ramly
Date Deposited: 10 Oct 2023 01:57
Last Modified: 10 Oct 2023 01:57

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