An Empirical Investigation of Causal Relationship of Chinese FDI to African Economies

Diouf Modou and Liu Hai Yun

International Journal of Academic Research in Business and Social Sciences, 2017, vol. 7, issue 3, 199-207

Abstract: Foreign direct investment (FDI) is frequently viewed as a fundamental component in any nation's given mission for economic development. There is slight uncertainty that the growth of Chinese trade and investment with developing and underdeveloped African states has furnished these countries with a supreme chance to rejuvenate their economies. This study reviewed driving factors of Chinese FDI to African economies utilizing a panel data from 1980- 2016. This study applied Granger causality test, under vector error correction modeling (VECM) to check causality among the factors. Whereas the determinants of FDI inflows were measured utilizing applying ECM and granger causality measurements as proposed by Anyanwu (2012), the dependent variable is FDI inflows to growth, was proxy by the proportion of FDI streams to total national output (GDP). Results showed that factors showing the determinants of FDI inflows have positive influence on development of West African and Monetary Unions economies.

Keywords: Chinas FDI; Granger Causality; West African and Monetary Unions economies (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:hur:ijarbs:v:7:y:2017:i:3:p:199-207

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