The impact of institutional quality on Chinese foreign direct investment in Africa

Andrew G Ross, Maktoba Omar, Anqi Xu and Samikshya Pandey
Additional contact information
Andrew G Ross: Edinburgh Napier University, UK
Maktoba Omar: Coventry University, UK
Anqi Xu: George Watson’s College, UK

Local Economy, 2019, vol. 34, issue 6, 572-588

Abstract: The purpose of this paper is to analyse the impacts of the host country institutional environment on Chinese foreign direct investment in Africa. As one of the few papers to explicitly address the role of institutions on China–Africa foreign direct investment, our results highlight that countries who are able to provide a politically stable environment and control levels of corruption exert the greatest effects on Chinese foreign direct investment. After controlling for firm level motivation, the findings also reveal that as Chinese economic development evolves so does the apparent strategic direction of their investment patterns with greater attention now being given to investment quality and return on investment, rather than simply acquiring and extracting natural resources. From a policy perspective, the findings suggest three areas of development to promote increases in, and the sustainability of Chinese investment in Africa. First, the implementation of mechanisms to better control levels of corruption. Second, the promotion of long-term political stability to reduce investor uncertainty, and third, increased investment in supply-side initiatives to boost host country productivity to reflect the changing nature of Chinese investment patterns in Africa.

Keywords: Africa; Beijing consensus; China; foreign direct investment; geo-political foreign direct investment; governance; institutions; outward foreign investment (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
https://journals.sagepub.com/doi/10.1177/0269094219882329 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sae:loceco:v:34:y:2019:i:6:p:572-588

DOI: 10.1177/0269094219882329

Access Statistics for this article

More articles in Local Economy from London South Bank University
Bibliographic data for series maintained by SAGE Publications ().