Robert Schuman Centre for Advanced Studies, European University Institute, Florence, Italy; e-mail: email@example.com.
Chinese FDI to Africa: What Is the Nexus with Foreign Economic Cooperation?*
Article first published online: 6 DEC 2010
© 2010 The Author. African Development Review © 2010 African Development Bank
African Development Review
Volume 22, Issue Supplement s1, pages 599–614, December / Decembre 2010
How to Cite
Sanfilippo, M. (2010), Chinese FDI to Africa: What Is the Nexus with Foreign Economic Cooperation?. African Development Review, 22: 599–614. doi: 10.1111/j.1467-8268.2010.00261.x
I am grateful to Giorgia Giovannetti and Mario Biggeri for their helpful suggestions. I have benefited from comments made by participants at the European Report on Development conference, ‘Financial markets, adverse shocks and policy responses in fragile countries’ in Accra, May 2009, and at the seminar ‘China's increasing engagement in Africa in the aftermath of the financial crisis’, organized by the African Development Bank in Tunis, March 2010.
- Issue published online: 6 DEC 2010
- Article first published online: 6 DEC 2010
Abstract: China, once a major recipient of foreign direct investment (FDI), has recently become one of the main ‘emerging’ investors, especially in developing countries. Chinese Outward Foreign Direct Investment (OFDI) plays a very prominent role in economic interaction with many African countries. This paper empirically investigates the determinants of Chinese OFDI versus 41 African countries over the period 1998–2007. The analysis is novel because it provides empirical support to the existing, so far purely anecdotic, evidence describing Chinese FDI to Africa as driven by natural resources endowments and market potential. The econometric analysis highlights strong interrelationships between Chinese FDI and economic cooperation, which make standard models of investments unfit when assessing the role of China in Africa. It also suggests some new lines of research, exploiting the strong links between these different sources of financing.